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V. Title 1. Chapter 4: Filings

A. Execution of Filings

Chapter 4 contains general provisions applicable to the execution and submission of a filing instrument.
  1. Section 4.003 provides the general provision relating to the execution of a filing instrument.  Section 4.003 states that a filing instrument must be signed by a person authorized by the BOC to act on behalf of the entity in regard to the filing instrument.
  2. Generally, a managerial official of the filing entity has the authority to execute a filing instrument.  A “managerial official” means an officer or governing person of the entity.  The attorney that prepared the document, an organizer of the entity, or the entity’s registered agent is not a “managerial official” of the entity.
  3. In order to determine who has the authority to act on behalf of the entity, you must look to the specific title governing the entity or to the specific provision applicable to the transaction.
    1. In the case of a for-profit corporation, nonprofit corporation, professional corporation, and a professional association, an officer must sign a filing instrument. (§20.001 BOC)
    2. In the case of a limited partnership, generally a general partner of the partnership must sign a filing instrument.  Section 153.553 contains specific execution requirements for certain instruments.  For example, all the general partners of the partnership must sign a certificate of formation.  A certificate of amendment must be signed by at least one general partner and also must be signed by each new general partner added by the certificate of amendment.  A withdrawing general partner need not sign an amendment that evidences the general partner’s withdrawal.
    3. Although title 3 does not contain a specific execution provision for filing instruments filed on behalf of a limited liability company, in general, the BOC did not intend any substantive change to the prior law.  Consequently, in the case of an LLC that is managed by managers, a manager of the LLC would execute the filing instrument.  In the case of an LLC that is not managed by managers, but is managed by its members, a managing or authorized member of the LLC should sign the filing instrument.

B. Facsimile Submission of Filings

Chapter 4 carries forward the authority to submit filing instruments by facsimile transmission available under prior law.
  1. The Texas Miscellaneous Corporation Laws Act, article 1302-7.07 the Texas Revised Limited Partnership Act, article 6132a-1, section 13.04; and the Texas Revised Partnership Act, section 3.08(b)(12), eliminate the requirement to file originally signed documents.  These requirements are carried forward to the BOC and may be found in section 4.003.
  2. The statutory provisions cited authorize the filing of any photostatic or facsimile copy of a signed instrument required or authorized to be filed with the secretary of state under a provision of the BOC, Texas Business Corporation Act, the Texas Non-Profit Corporation Act, the Texas Limited Liability Company Act, the Texas Revised Limited Partnership Act, and the Texas Revised Partnership Act.  In addition to the provisions cited, the Texas Business & Commerce Code, section 36.18, authorizes the secretary of state to accept for filing photographic or similarly reproduced copies of originally signed assumed name documents.
  3. The Corporations Section maintains four facsimile machines on a rotary line for the receipt of documents and messages.  The facsimile number is (512) 463-5709.  If a document is transmitted by fax, credit card information or LegalEase debit card information must accompany the transmission (SOS form 807).  The secretary of state accepts only MasterCard, Visa, and Discover credit cards.  Fees paid by credit card are subject to a statutorily authorized convenience fee, currently 2.7% of the total fees incurred.

C. Enhanced Penalties for the Submission of a Fraudulent or False Filing

The BOC imposes both criminal and civil penalties for the submission of a false or fraudulent filing instrument.
  1. Under prior law, it is a Class A misdemeanor to knowingly sign a document that is materially false with the intent that it be filed with the secretary of state.  House Bill 1507, effective September 1, 2005, amended the Texas Business Corporation Act to increase the offense to a state jail felony if the person signing the document intended to defraud or harm another.
  2. Section 4.008 of the BOC applies to all filing instruments under the BOC.  Similar to provisions under prior law, section 4.008 of the BOC provides for criminal penalties if a person signs or directs the filing of a filing instrument that the person knows is materially false.  The BOC enhances the penalty to a state jail felony if the actor’s intent is to defraud or harm another.
    1. A Class A misdemeanor is punishable by a sentence of up to 180 days, a fine of up to $4,000, or both.
    2. A state jail felony is generally punishable by a sentence of 180 days to 2 years plus a fine of up to $10,000.
  3. Section 4.007 of the BOC provides, under certain circumstances, for a person to recover damages, court costs, and reasonable attorney’s fees if the person incurs a loss caused by a forged filing instrument, or a filing instrument that constitutes a criminal offense under the BOC.  An injured person may recover from:
    1. each person who forged or knowingly signed a false instrument;
    2. any managerial official who directed the signing and filing of the filing instrument who knew or should have known of the false statement or omission; or
    3. the entity that authorized the filing of the instrument.
  4. The secretary of state does not have authority to initiate a criminal action or to pursue a civil suit for damages on behalf of injured parties.

D. Forms

The BOC authorizes the secretary of state to promulgate forms for filings required or permitted under the BOC.  Use of all SOS forms is permissive and not mandatory.
  1. Until January 1, 2010, prior law will continue to govern requirements for filing instruments submitted by existing entities that have not elected to adopt the BOC prior to its mandatory application date.  While the enactment of the BOC did not substantially change filing requirements with respect to certain instruments (e.g., a statement of change of registered agent and/or office), with respect to other filing instruments (e.g., articles of dissolution and reinstatements), the requirements of prior law differ from the requirements of the BOC.  Consequently, a person who chooses to use a promulgated form should exercise care when selecting the appropriate form.
  2. In an effort to facilitate the selection process, the secretary of state’s web site contains a new form selection page.
    1. A domestic or foreign filing entity formed or registered before January 1, 2006, that has not elected to adopt the provisions of the BOC by filing an early adoption statement with the secretary of state must click on the “bar” entitled “For Entities Formed Before January 1, 2006” to obtain an appropriate form for submission of a filing instrument.
    2. A domestic or foreign filing entity formed on or after January 1, 2006, must click on the “bar” entitled “For Entities Formed On or After January 1, 2006.”  An entity formed or registered before January 1, 2006, that has filed an early adoption statement with the secretary of state to adopt the BOC before its mandatory application date would select forms in the same manner.
    3. Once the appropriate option has been selected, an index of forms suitable for filing will appear.  The forms are provided in Word and PDF formats.
  3. When filing requirements under prior law did not substantially differ from the filing requirements under the BOC, an SOS form was designed for use by both BOC and non-BOC filing entities.  A shared form is identified by the same SOS form number and appears on the BOC forms index page and the non-BOC forms index page.
  4. Use of an SOS BOC form by a non-BOC entity is not recommended.  However, a filing instrument will not be rejected solely on this basis.  If the BOC form used also complies with the filing requirements of prior law, the instrument will be filed.  This filing action however does not effect an early election to adopt the BOC.   In order to adopt the BOC, the non-BOC entity must take affirmative action pursuant to section 402.003(a) of the BOC and file an early adoption statement (SOS form 808 or 809).

E. Effectiveness of Filings

The general rule is that filings take effect on filing by the secretary of state, except when the effectiveness of the instrument is delayed as provided by subchapter B of chapter 4.
  1. Pursuant to sections 4.052 and 4.053 of the BOC the effectiveness of an instrument may be delayed to a date not more than ninety (90) days from the date the instrument is signed (Option B on SOS forms with an effectiveness of filing provision).  The effectiveness of the instrument also may be delayed on the occurrence of a future event or fact, other than the passage of time (Option C on SOS forms with an effectiveness of filing provision).
  2. If the effectiveness of an instrument is delayed on the occurrence of a future event or fact, the instrument must also state the manner in which the event or fact will cause the instrument to take effect and the date of the 90th day after the date the instrument is signed.  In order for the instrument to take effect, the entity must, within ninety (90) days of the date of the filing of the instrument, file with the secretary of state a statement regarding the event or fact pursuant to section 4.055 of the BOC (SOS form 805).  The statement is to be executed by each organization required to execute the instrument filed.
  3. On the filing of an instrument with a delayed effective date or condition, the computer records of the secretary of state will be changed to show the filing of the document, the date of the filing, and the future date on which the document will be effective or evidence that the effectiveness of the instrument was conditioned on the occurrence of a future event or fact.  In addition, at the time of such filing, the computer records of the secretary of state will reflect the action taken by the filing instrument.  For example, if the effectiveness of a certificate of amendment changing the name of an entity is delayed as provided by law, the new entity name will receive a status of “in use” and be shown as the legal name of the entity on the records of the secretary of state as of the date of filing by the secretary of state. Further, the former name of the entity will be given an inactive name status of “prior name.”
  4. The delayed effectiveness provisions of prior law listed the types of documents the effectiveness of which could be delayed.  Instead of listing the filing instruments that may have a delayed effectiveness, the BOC provides a list of filing instruments the effect of which cannot be delayed.  Pursuant to section 4.058 of the BOC, the following instruments may not contain a delayed effective date or condition:
    1. a name reservation;
    2. a name registration;
    3. a statement of event or fact relating to an instrument filed with a delayed effective condition; and
    4. a certificate of abandonment.

F. Abandonment of Documents

When determining whether a particular filing instrument can be abandoned after filing with the secretary of state, it is important to know whether prior law or the BOC governs the filing.
  1. Article 9.03F of the Texas Limited Liability Company Act and section 2.12F of the Texas Revised Limited Partnership Act permit a filed document that has had its effectiveness delayed to be abandoned if the event or transaction has not become effective.
  2. Except as noted below, documents filed pursuant to the Texas Business Corporation Act cannot be abandoned after filing with the secretary of state.
    1. A merger, share exchange or a conversion filed under the Texas Business Corporation Act may be abandoned (subject to any contractual rights) at any time before the filing has become effective.
    2. Article 4.02 of the Texas Business Corporation Act permits the abandonment of an amendment to the articles of incorporation under certain circumstances.  An amendment to the articles of incorporation may be abandoned if the resolution authorizing the proposed amendment provides that at any time before the filing of the amendment with the secretary of state becomes effective, notwithstanding the authorization of the proposed amendment by the shareholders, the board of directors may abandon the proposed amendment without further action by the shareholders.
  3. Section 4.057 of the BOC permits the parties to file a certificate of abandonment of a filing instrument if the instrument has not taken effect.
  4. On filing, the secretary of state records the filing of an instrument with a delayed effective date or condition and takes necessary action at that time to create new entities, change the status of merged or converting entities, and change names when amended by the filed document.  Consequently, when a statement of abandonment is submitted as permitted by law, the secretary must determine whether the former name of any entity is available or whether the organizational documents need to be amended to change the name. If the likelihood exists that the parties might abandon the transaction, consider filing a name reservation for the prior or former name of an entity that may need to be reactivated.
  5. When the effectiveness of a document is conditioned on the occurrence of a future event other than the passage of time (delayed effective condition), the entity is required to file a statement with the secretary of state within ninety (90) days from the date of execution of the instrument in order to effect the transaction evidenced by the filing.  Please note that the failure to file the statement regarding the satisfaction or waiver of the delayed effective condition does not effect an abandonment of the filed document.  In order to abandon the document, a certificate of abandonment must be filed with the secretary of state.

G. Filing Fees

All filing fees are contained in a single chapter of the BOC and are made applicable to comparable filings submitted under prior law.
  1. Section 4.151 contains a list of filing fees that are applicable to all filing entities.  This section contains the fees relating to name reservations, name registrations, certificates of correction, certificates of merger, conversion or exchange, and the preclearance of a filing instrument.
  2. Sections 4.152 through 4.161 contain the filing fees for instruments filed by specific entity types.  In general, the BOC standardized filing fees for comparable filings using the TBCA filing fees in effect at the time of passage as the standard.  As a result, filing fees for LLC filing instruments increased and many of the filing fees for limited partnership filings decreased.  In general, the filing fees for nonprofit corporations remained the same.
  3. Section 402.002 of the BOC makes BOC filing fees applicable to comparable filings made under prior law.  When submitting a filing under the provisions of the Texas Business Corporation Act, Texas Non-Profit Corporation Act, Texas Professional Corporation Act, Texas Professional Association Act, Texas Limited Liability Company Act, Texas Revised Limited Partnership Act, and the Texas Revised Partnership Act, refer to the filing fee provisions of chapter 4 of the BOC rather than prior law.
  4. Effective January 1, 2006, a standard $50 preclearance fee will be applied to all documents that are precleared by the secretary of state.  The $50 fee was based on the preclearance fee established for the preclearance of a limited partnership document under the Texas Revised Limited Partnership Act.
  5. Expedite fees are authorized under section 405.032 of the Texas Government Code.  Consequently, the enactment of the BOC did not affect the procedures or fees relating to expedited processing of documents and orders with the Office of the Secretary of State.  The expedite fee remains at $25 per document expedited.  The expedite fee for certificates of fact and certified copies remains at $10 per certificate ordered.

H. Acknowledgment of Filing

  1. Section 4.002 of the BOC provides that the secretary of state shall deliver a "written or electronic acknowledgment of filing to the entity or its representative."
  2. Unlike the predecessor statutes, the language of the BOC does not require the secretary of state to issue certificates in acknowledgment of the filing action.  The language does not however preclude the issuance of a certificate that acknowledges the filing.  Accordingly, the secretary of state will continue the practice of issuing a certificate under the signature and seal of the secretary of state.

I. Certificate of Correction

The correction of a filing instrument, and not the revocation of the filing.
  1. A corporation, limited liability company, or limited partnership may correct an instrument that was filed with the secretary of state when the instrument is an inaccurate record of the action referred to in the instrument, contains an inaccurate or erroneous statement, or was defectively executed.
  2. Documents may be corrected to contain only those statements that lawfully could have been included in the original instrument.  The articles/certificate of correction may not be used to alter, include, or delete a statement that by its alteration, inclusion, or deletion would have caused the secretary of state to determine that the document did not conform to law.
  3. The filing of the articles/certificate of correction relates back to the original date of the filing except as to those persons who are adversely affected by the correction.  In the case of a person adversely affected by the correction, the filing instrument is considered to have been corrected on the date the certificate of correction is filed.
  4. Corrections do not void or revoke the original filing as the statutory provisions for correction specifically provide that any certificate issued by the secretary of state with respect to the effect of filing the original instrument is considered to be applicable to the instrument as corrected.  The BOC carries forward the provisions of prior law in Sections 4.101 through 4.105.