TITLE: Relating to shareholder standing after a merger.

SUMMARY: Relating to shareholder standing after a merger.

FULL TEXT:
AN ACT relating to shareholder standing after a merger. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Section 21.552, Business Organizations Code, is amended to read as follows: Sec. 21.552. STANDING TO BRING PROCEEDING. [(a)] A shareholder may not institute or maintain a derivative proceeding unless: (1) the shareholder: (A) was a shareholder of the corporation at the time of the act or omission complained of; or (B) became a shareholder by operation of law from a person that was a shareholder at the time of the act or omission complained of; and (2) the shareholder fairly and adequately represents the interests of the corporation in enforcing the right of the corporation. [(b) To the extent a shareholder of a corporation has standing to institute or maintain a derivative proceeding on behalf of the corporation immediately before a merger, Subchapter Jor Chapter 10 may not be construed to limit or terminate the shareholder's standing after the merger.] SECTION 2. This Act takes effect September 1, 2011.