Five Minute Guide to the TBOC

The information provided is not a substitute for the advice of an attorney.
No warranty is made that it is current, complete, accurate, or suitable for any particular purpose.

The Five-Minute Guide to the TBOC

What is the Texas Business Organizations Code (the "Code" or "TBOC")?

The TBOC is a largely non-substantive codification of the existing statutes governing most for-profit and nonprofit entities in Texas that:

Was enacted by the legislature in 2003 and extensively amended in 2005,
Becomes effective on January 1, 2006, and
Does not completely replace the prior law it amends and codifies until January 1, 2010

What are the principal types of entities the TBOC governs?

Corporations – for-profit, nonprofit, and professional
LLCs and PLLCs
Partnerships – general, limited, and limited liability
Professional Associations
Cooperative Associations
REITs

What key changes does the TBOC make?

Reorganizes and restructures the law it replaces
Simplifies and standardizes filing procedures and other provisions among entities
Re-names most filing documents for Code entities
Raises most filing fees for both pre-Code and Code entities (and lowers certain fees, too)
Introduces new terminology and concepts
Provides an amnesty period from Jan. 1-30, 2006 for unregistered foreign entities doing business in Texas
Subjects more foreign entities to registration and to penalties for failure to register

What will the TBOC changes apply to starting January 1, 2006?

Filing fees for all entities, regardless of formation date
New entities formed on or after January 1
Initial limited liability partnership ("LLP") registrations, both domestic and foreign
Renewals of existing LLP registrations, both domestic and foreign
Initial foreign entity registrations on or after January 1
Foreign nonfiling entities such as general partnerships and LLPs (except non-US LLPs)

The simple rule of thumb is that if a type of entity listed above is formed or registered after January 1, 2006, it is governed by the TBOC. If the entity existed before January 1, 2006, it continues to be governed by the prior law until January 1, 2010. While LLP registrations are governed by the Code after their renewal in 2006, other aspects of the LLP will continue to be governed by prior law.

What are the most common filing fees that changed? (Knowing this will help to avoid rejected filings.)

Amounts include $25 state expedite fee.
Selected state filing fees that go up	2005	2006
Form a PA	$225.00	$775.00
Form an LLC	$225.00	$325.00
Register an out-of-state LLC	$525.00	$775.00
Amend an LLC	$125.00	$175.00
All other LLC filing fees	rise to corporate price
Convert or merge an entity Mergers and conversions now require a fee for any new entity formed.	rise by $300-$825

What key terms are renamed by the TBOC?

To see a longer list of terms renamed by the TBOC, click here.

What are the most important new terms introduced by the TBOC?

TBOC Term	Definition
domestic entity	an organization formed under or whose internal affairs are governed by the TBOC. The term "entity" may refer to a domestic or foreign entity.
filing entity	a domestic entity that is a corporation, limited partnership, limited liability company, professional association, cooperative, or real estate investment trust (i.e. all entities that require a filing for their formation)
governing authority/person	a person or group of persons who are entitled to manage and direct the affairs of an entity under the Code and the governing documents of the entity, not to include officers
governing documents	the certificate of formation for a domestic filing entity or the document or agreement under which a domestic nonfiling entity is formed; and the other documents or agreements adopted by the entity under the TBOC to govern the formation or the internal affairs of the entity
LLLP or triple LP	a limited liability limited partnership, that is, a limited partnership registered as a limited liability partnership
nonfiling entity	a domestic entity that is not a filing entity, including a domestic general partnership, LLP, and nonprofit association