Take -out
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- Limited derivative proceedings: Public companies trained in Texas can now adopt provisions forcing specific capital holders to respond to a Minimum property threshold – up to 3% of current equity – to file derived complaints. This change aims to limit the disputes of actions holders with small participations and to align Texas with other jurisdictions adapted to companies.
- Codification of the commercial judgment rule: SB 29 Codifies the long -standing principle of the Supreme Court of Texas which protects certain guiding bodies (such as the administrators and managers of companies, or members, managers and managers of LLC) of the responsibility of good faith decisions taken in the best interests of the company.
- Dispute management tools: Some Texas entities can now:
- Select exclusive places within the State for the internal disputes of the company.
- Give up trials before jury For internal entities complaints through documents governing – potentially rationalization and deactivation of disputes.
- Competitive change in Delaware: Governor Abbott cited the legal battle of Elon Musk in Delaware on his Tesla compensation as a catalyst for reforms. Musk moved the legal seat of several of his companies, including Tesla and SpaceX – in Texas in 2024.
May 14, 2025, Governor Greg Abbott signed Senate bill 29 (SB 29) In law, marking a major change in the governance of Texas companies by limiting the capacity of holders of minority actions in public companies to bring derived proceedings, to codify the rule of commercial judgment and to grant Texas entities for new tools to manage internal disputes.
Signed complementary legislation:
- Senate bill 1058 Expected by the scholarships based in Texas from certain tax obligations of franchise from January 1, 2026.
- Joint resolution of house 4 proposes a constitutional amendment prohibiting the taxation of stock exchange and the safeguard of retirement accounts – establish the approval of voters in the November 2025 shield.
Implications for companies:
Texas is positioned as a direct competitor of Delaware for entity charters. These reforms can call on companies requesting a reduction in the risk of dispute, rationalized internal litigation processes and less -year -old judicial power on business decisions.
What should companies do now?
- Evaluating whether the Charter in Texas can offer strategic advantages.
- Examine and potentially modify the documents governing new disputes management tools.
- Monitor future constitutional amendments which can further reduce the tax burden of financial activities in Texas.
To obtain advice on how SB 29 and related reforms can have an impact on your business or to explore strategic restructuring in Texas, please contact your local Dykema relationship.