Texas Business Organizations Code
The unified Texas statute that governs the formation, governance, internal operations, and termination of Texas business entities including for-profit corporations, LLCs, partnerships, and other domestic entities. Often abbreviated "TBOC."
The Texas Business Organizations Code (often abbreviated "TBOC") is the unified Texas statute that governs the formation, governance, internal operations, and termination of Texas business entities. Codified at Tex. Bus. Orgs. Code §§ 1.001 et seq., it supplanted the predecessor Texas business statutes (the Texas Business Corporation Act, the Texas Limited Liability Company Act, the Texas Revised Limited Partnership Act, the Texas Revised Partnership Act, and others) effective January 1, 2010, when its mandatory application phase concluded.
Structure
The TBOC is organized into eight titles:
Title 1. General provisions applicable to all entities, §§ 1.001–12.261. Includes definitions, formation, name reservation, registered agents, foreign-entity registration, mergers and conversions, dispositions of property, fundamental business transactions, and winding up.
Title 2. Corporations, §§ 20.001–23.110. Chapter 20 contains general provisions, Chapter 21 governs for-profit corporations, Chapter 22 governs nonprofit corporations, and Chapter 23 governs special-purpose corporations.
Title 3. Limited liability companies, §§ 101.001–101.636.
Title 4. Partnerships (general partnerships, limited partnerships, limited liability partnerships), §§ 151.001–154.205.
Title 5. Real estate investment trusts, §§ 200.001–200.503.
Title 6. Associations (cooperative associations and unincorporated nonprofit associations), §§ 251.001–252.018.
Title 7. Professional entities, §§ 301.001–304.001.
Title 8. Miscellaneous and transition provisions, §§ 401.001–402.015.
Hub-and-spoke design
The TBOC was designed on a "hub-and-spoke" model: Title 1 contains general provisions applicable to all entities (the "hub"), and Titles 2 through 7 contain entity-specific provisions (the "spokes"). When working with a TBOC question, the answer is typically found in the entity-specific title first, supplemented by the general provisions of Title 1.
Definitions
The TBOC contains a substantial general-definitions section at § 1.002, supplemented by entity-specific definitions in each title's lead chapter (e.g., § 21.002 for corporations, § 101.001 for LLCs). A TBOC term may be defined in both places.
Recent amendments
The TBOC has been amended in significant respects at every legislative session since enactment. Notable recent amendments include:
(1) 2021 (eff. Sept. 1, 2021): Indemnification flexibility expanded to permit restrictions in any "governing document" (§ 8.003); LLC-distribution insolvency test refined to permit GAAP/IFRS-based asset valuation (§ 101.206).
(2) 2021 legislation (eff. June 1, 2022): S.B. 1523 authorized the "registered series" of an LLC, formed by filing a certificate of registered series with the Texas Secretary of State (§ 101.623), and added a signature rule for registered-series filings (§ 101.0515(b)).
(3) 2023: H.B. 19 (eff. Sept. 1, 2023) created the Texas Business Court (Tex. Gov't Code ch. 25A), which began operating September 1, 2024. The same session's S.B. 1514 also amended many TBOC provisions.
(4) 2025 (eff. May 14, 2025): SB 29 enacted the most significant Texas corporate-governance amendments in a generation. New § 21.419 (statutory presumptions favoring directors and officers of corporations with listed voting shares and corporations that opt in); amendments to § 21.218 (narrowed books-and-records inspection rights, including language in subsection (b) excluding emails, texts and social media unless the communication effectuates corporate action, and new subsection (b-2), which for listed and opt-in corporations treats a demand as lacking a proper purpose if it is made in connection with an active, pending or expected derivative proceeding or lawsuit between the parties); new § 21.552(a)(3) (authorizing listed corporations, and opt-in corporations with 500 or more shareholders, to set a derivative-action ownership threshold of up to 3% in the certificate of formation or bylaws); new § 21.561(c) (no attorney's fees for disclosure-only derivative settlements); amended § 2.115 (exclusive forum and venue clauses in governing documents); new § 2.116 (jury-waiver clauses in governing documents); amended § 101.401 (LLC fiduciary-duty elimination through company agreement); new § 152.002(e) (extending limited-partnership fiduciary-duty elimination authority).
(5) 2025 (eff. Sept. 1, 2025): H.B. 40 reduced the Business Court's amount-in-controversy threshold for the categories in Gov't Code § 25A.004(d), such as qualified transactions and contracts designating the court, from $10 million to $5 million. Governance and internal-affairs cases under § 25A.004(b) already carried a $5 million threshold.
The TBOC has governed newly formed Texas entities since January 1, 2006, and all Texas entities since January 1, 2010. Because the Legislature amends the code frequently, a TBOC citation should be read against the version in effect on the relevant date.
Full entry: Texas Business Organizations Code
Practice guide: Texas Corporate Governance