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 filing 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, §§ 1.001–12.355. 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, §§ 21.001–22.515. Chapter 21 governs for-profit corporations; Chapter 22 governs nonprofit corporations.
Title 3. Limited liability companies, §§ 101.001–101.622.
Title 4. Partnerships (general partnerships, limited partnerships, limited liability partnerships), §§ 151.001–154.402.
Title 5. Real estate investment trusts, §§ 200.001–200.564.
Title 6. Associations (cooperatives, professional associations), §§ 251.001–252.018.
Title 7. Professional entities, §§ 301.001–304.003.
Title 8. Miscellaneous and transition provisions, §§ 401.001–402.014.
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 8 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. The Texas Bar Foundation publishes an annotated version that organizes provisions by entity type.
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). Practitioners should consult both the general and entity-specific definitions when interpreting a TBOC term.
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) 2022 (eff. June 1, 2022): Series LLC framework expanded to authorize "registered series" with separate Texas Secretary of State filings (§§ 101.621–101.622); LLC filing-instrument signature requirements tightened to require authorized officer, manager, or member (§ 101.0515).
(3) 2023 (eff. Sept. 1, 2024): Texas Business Court created by HB 19 (Tex. Gov't Code Ch. 25A); related TBOC and Texas Government Code amendments.
(4) 2025 (eff. May 14, 2025): SB 29 enacted the most significant Texas corporate-governance amendments in a generation. New § 21.419 (codified business judgment rule for publicly-traded and opt-in corporations); amendments to § 21.218 (narrowed books-and-records inspection rights, including new (b-1) excluding emails/texts/social media unless those communications effectuate corporate action, and new (b-2) authorizing denial of demands made in connection with anticipated derivative proceedings); new § 21.552(a)(3) (3% derivative-action ownership threshold for publicly-traded and opt-in corporations); 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): HB 40 reduced the Business Court's amount-in-controversy threshold from $10 million to $5 million for most categories of cases.
The TBOC is now in its 16th year of operation as the unified Texas business-entity statute. Its hub-and-spoke design and contractual-flexibility orientation make Texas one of the most user-friendly U.S. business-entity codes. The 2024–2025 amendments, combined with the Texas Business Court's operationalization in September 2024, have repositioned Texas as a serious competitor to Delaware as a state of corporate domicile for the first time in modern history. Practitioners should expect continued amendment activity as the Texas Business Court generates published opinions and as the Legislature responds to the comparative analysis between Texas and Delaware corporate-governance regimes. Mark the date of every TBOC citation: provisions that read accurately in 2024 may have been substantially amended in 2025.
Full entry: Texas Business Organizations Code