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Tex. Bus. Orgs. Code § 153.402

STANDING TO BRING PROCEEDING

Applied in 2 court decisions — leading case Wesolek v. Layton (2012)

Most recently applied in Wesolek v. Layton (December 2012)

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff

(a) Subject to Subsection (b), a limited partner may not institute or maintain a derivative proceeding unless:

(1) the limited partner:

(A) was a limited partner of the limited partnership at the time of the act or omission complained of; or

(B) became a limited partner by operation of law originating from a person that was a limited partner or general partner at the time of the act or omission complained of; and

(2) the limited partner fairly and adequately represents the interests of the limited partnership in enforcing the right of the limited partnership.

(b) If the converted entity in a conversion is a limited partnership, a limited partner of that limited partnership may not institute or maintain a derivative proceeding based on an act or omission that occurred with respect to the converting entity before the date of the conversion unless:

(1) the limited partner was an equity owner of the converting entity at the time of the act or omission; and

(2) the limited partner fairly and adequately represents the interests of the limited partnership in enforcing the right of the limited partnership.

Official source: Texas Constitution and Statutes. Reproduced from public-domain Texas statutes; confirm against the official source for the current text. Not legal advice.