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SB2411

Regular Session

Relating to business organizations.

Moderate
Low Cost
Effective:2025-09-01
Enforcing Agencies

State District Courts • Texas Business Courts • Texas Secretary of State

SB2411
Moderate
Relating to business organizations.
Moderate Compliance Urgency
Requires near-term attention
Cost Impact
Low
Effective
2025-09-01
Enforcing Agencies
State District CourtsTexas Business CourtsTexas Secretary of State
Primary Author: Sen. Charles Schwertner
89th Texas Legislature
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01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: September 1, 2025
  • Compliance Deadline: September 1, 2025. (Cooperative Associations must implement new compensation reporting for the first annual meeting occurring after this date).
  • Agency Rulemaking: The Secretary of State is not explicitly required to promulgate new rules, but will release updated filing forms (specifically for Certificates of Validation and Restated Certificates) prior to the effective date.

Immediate Action Plan

  • Amend Certificate of Formation: Immediately draft amendments to extend liability exculpation to all "managerial officials," not just directors. This protection is not automatic; it must be in the Certificate.
  • Lock in Venue: Amend Bylaws/Company Agreements to designate the Texas Business Court as the exclusive forum for internal disputes to avoid general District Courts.
  • Update Capital Templates: Insert statutory irrevocability clauses into all new LLC/LP subscription agreements.
  • Establish Electronic Portals: Coordinate with IT to create secure viewing portals for shareholder notices to reduce mailing costs.

Operational Changes Required

Contracts

  • Subscription Agreements: You must amend LLC and LP subscription agreement templates. To make them binding, you must now include a specific clause stating the subscription is "irrevocable" pursuant to the new statutory sections.
  • M&A Plans: Revise "Plan of Merger" and "Plan of Exchange" templates. Remove confidential disclosure schedules and letters from the primary document to avoid requiring shareholder votes on sensitive operational data.

Hiring/Training

  • Board Governance: Brief your Board of Directors and Corporate Secretary. They may now approve contracts and instruments in "substantially final form," delegating finalization to officers. This requires updating Board Resolution templates to define the scope of that delegation.

Reporting & Record-Keeping

  • Cooperative Associations:
  • 1. Stop filing the Annual Report of Financial Condition with the Secretary of State (requirement repealed).
  • 2. Start tracking individual officer/director compensation. This data must now be disclosed in the annual report distributed to members.
  • Shareholder Notices: Implement a secure electronic portal. You are no longer required to mail the full text of written consents to shareholders; you may now provide a notice with a link to the document.
  • Restated Certificates: File Restated Certificates of Formation to remove names of *initial* directors and replace them with *current* directors to clean up the public record.

Fees & Costs

  • Curing Defects: The cost to file a "Certificate of Validation" (used to fix past corporate errors) has increased. It is now the base fee ($15 or $5) PLUS the filing fee of the attached instrument.
  • *Example:* Validating a defective merger will now cost $315 (previously $15).

Strategic Ambiguities & Considerations

  • "Substantially Final" Threshold: The statute allows boards to approve drafts, but does not define what constitutes a "substantial" change that would invalidate the approval. Risk: If an officer negotiates a material economic change (e.g., indemnity caps or price) after the Board meeting, the approval may be void.
  • Concurrent Jurisdiction: The bill allows disputes to be heard in either District Courts or the new Business Courts. Risk: Unless you designate a specific venue in your Bylaws, plaintiffs will forum-shop.

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Mar 12, 2025
Passed Senate
Apr 15, 2025
Passed House
May 14, 2025
Signed
May 27, 2025
TopicsBusiness & CommerceBusiness & Commerce--generalCorporations & AssociationsCourtsCourts--districtFinancialFinancial--generalCourts--civil ProcedureSecretary of State
03

Senate Authors

Sen. Charles SchwertnerRepublican · Primary Author

House Sponsor

Rep. Oscar LongoriaDemocrat · Primary Sponsor

Bill Text(with markup)

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View bill text in multiple formats on Texas Legislature website

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Quick Reference

Frequently Asked Questions

Common questions about SB2411

Q

What does Texas SB2411 do?

SB2411 fundamentally alters corporate governance by expanding officer liability protections, authorizing "substantially final" board approvals, and tightening derivative suit rules. All Texas domestic entities—particularly Corporations, LLCs, and Cooperatives—must amend governing documents to capture these benefits and comply with new reporting standards. Implementation Timeline Effective Date: September 1, 2025 Compliance Deadline: September 1, 2025.

Q

Who authored SB2411?

SB2411 was authored by Texas Senator Charles Schwertner during the Regular Session.

Q

When was SB2411 signed into law?

SB2411 was signed into law by Governor Greg Abbott on May 27, 2025.

Q

Which agencies enforce SB2411?

SB2411 is enforced by State District Courts, Texas Business Courts and Texas Secretary of State.

Q

How urgent is compliance with SB2411?

The compliance urgency for SB2411 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

Q

What is the cost impact of SB2411?

The cost impact of SB2411 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does SB2411 address?

SB2411 addresses topics including business & commerce, business & commerce--general, corporations & associations, courts and courts--district.

Legislative data provided by LegiScanLast updated: November 25, 2025

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