What You Must Know About the Business Organizations Code
The State Bar of Texas Business Law Section formed the Business Organizations Code Committee in 1995 for the purpose of reorganizing, modernizing, simplifying, restating and clarifying the Texas statutes affecting business entities. In 2003 the Legislature passed a massive 800+ page bill creating the Texas Business Organization Code (BOC), to be effective January 1, 2006. In 2005 the Legislature passed additional amendments, even though the law had not yet gone into effect.
The BOC applies to all new Texas corporations, partnerships, limited liability companies and other domestic filing entities formed on and after January 1, 2006, as well as all foreign filing entities registering to transact business in Texas on or after that date. Existing domestic and foreign entities will be "grandfathered" until January 1, 2010, unless those entities choose to be governed by the BOC sooner.
The BOC will affect all businesses in Texas in one way or another. Existing businesses will need to consider whether to elect to be governed by the BOC prior to 2010, and will likely need to update their organizational and operational documents to prepare for a smooth transition. In addition, practically all the forms drafted prior to 2005 are now obsolete, and will need to be updated to reflect the new vocabulary and structure of the BOC.
As business lawyers in Killeen, Texas, we at Roberts & Roberts, LLP have been preparing for the transition to the BOC since 2003. We are ready to assist with forming new entities under the BOC, as well as planning strategies for existing businesses. If you have questions about how the BOC will affect your business, or wish to discuss available options for your business under this new law, please call us to schedule an appointment.