Blockchain Legal Resource

A prominent cryptocurrency exchange’s recent announcement that it had reincorporated from Delaware to Texas has created a buzz among publicly traded digital asset businesses. The move follows an invitation from Texas Governor Greg Abbott to come to “Y’all Street” and a series of recent legislative developments in Texas to modernize the Texas Business Organizations Code (TBOC) to make Texas more attractive as a place to incorporate. In this article we summarize some changes in the laws governing Texas business entities resulting from the recently completed session of the Texas Legislature.

Texas Business Court

Established in 2024, the Texas Business Court is a statewide, specialized trial court with a focus on complex commercial matters. A summary of the most significant amendments from the 2025 legislative session affecting the Texas Business Court are set forth below:

• Lowers the threshold for the amount in controversy from $10 million to $5 million for suits arising under a “qualified transaction” and for certain actions arising out of a violation of the Finance Code or the Business & Commerce Code, among other claims.
• Expands the definition of “qualified transaction” to include a series of related transactions.
• Provides that the amount in controversy for the Business Court’s jurisdictional purposes is “the total amount of all joined parties’ claims.”
• Clarifies that, assuming the amount in controversary threshold is met, the Business Court has jurisdiction over any action “arising out of a business, commercial or investment contract or transaction,” as opposed to any action “that arises out of a contract or commercial transaction,” in which the parties to the contract or transaction agreed in the contract or a subsequent agreement that the Business Court has jurisdiction of the action.
• Adds to the Business Court’s jurisdiction (1) actions arising under the Texas Uniform Trade Secrets Act, Chapter 134A, Civil Practice and Remedies Code and (2) actions arising out of or relating to the ownership, use, licensing, lease, installation, or performance of intellectual property, including computer software, software applications, information technology and systems, data and data security, pharmaceuticals, biotechnology products, bioscience technologies, and trade secrets.
• Confirms that the Business Court has jurisdiction concurrent with district courts over actions to enforce an arbitration agreement, appoint an arbitrator, review an arbitral award, and take other judicial actions relating to or in support of arbitration proceedings, so long as a claim included in the arbitration is within the Business Court’s jurisdiction and satisfies the required amount in controversy.
• Aligns the language regarding the Business Court’s supplemental jurisdiction with its federal analog. The statute now gives the Business Court supplemental jurisdiction “over any other claim so related to the action that the claim forms part of the same case or controversy.” The statute retains the requirement that a supplemental claim may only proceed in Business Court if all parties to the claim and the Business Court judge agree to the exercise of supplemental jurisdiction.
• Excludes from the Business Court’s jurisdiction any claim related to a consumer transaction to which a consumer in Texas is a party that arises out of a violation of federal or state law.
• Directs the Texas Supreme Court to “establish procedures for the prompt, efficient, and final determination of business court jurisdiction on the filing of an action in the business court,” with a focus on “efficiently addressing complex business litigation in a manner comparable to or more effective than the business and commercial courts operating in other states.” The new provision authorizes the supreme court to, among other things, (1) provide for jurisdictional determinations based on pleadings or summary proceedings, (2) establish limited periods during which issues or rights must be asserted, and (3) provide for interlocutory or accelerated appeals.
• Allows entities to establish venue in a county located in an operating division of the Business Court by provisions in the entities’ governing documents with respect to actions regarding (1) governance, governing documents, or internal affairs; (2) acts or omissions of an owner, controlling person, or managerial official; (3) breach of duty by an owner, controlling person, or managerial official; or (4) the Business Organizations Code.

New Entity Governance Provisions

Other recently enacted Texas legislative amendments in 2025 include various provisions impacting corporate governance of Texas entities, such as:

• authorize a domestic Texas entity to include in its governing documents a waiver of jury trial concerning internal entity claims (that is, claims involving the internal affairs of the entity);
• entity governing documents can specify an exclusive court forum and venue for internal entity claims;
• shareholder records inspection rights are severely limited for a publicly traded corporation if the requesting shareholder has any pending litigation or derivative proceeding with the corporation;
• authorizes a novel procedure for advance court determination of independence and disinterested status of directors in the context of shareholder derivative actions or conflict of interest transactions;
• the officers and directors of a Texas corporation that has voting shares listed on a national securities exchanges or that has included in its governing documents an affirmative election to be governed by this new provision will be entitled to a presumption that they acted in good faith, on an informed basis, in furtherance of the corporation’s interests, and in obedience to the law and the corporation’s governing documents, which could be viewed as a codification of a version of the so-called “business judgment rule” for corporations; and somewhat similar provisions are added for limited liability companies and limited partnerships as well;
• authorizes a publicly traded Texas corporation (or an electing Texas corporation with more than 500 shareholders) to establish in its governing documents an ownership threshold for shareholder derivative actions, with the threshold not to exceed three percent of its outstanding shares;
• eliminates awards of attorney fees to a plaintiff for a settlement in a derivative proceeding on behalf of Texas corporations, LLCs or limited partnerships based only on amending disclosures to owners;
• clarifies existing Texas law by authorizing a Texas limited partnership or LLC to eliminate the duties of members, partners, managers, and officers in its governing documents; and
• permits Texas corporations to limit shareholder proposals.

Some additional amendments are also summarized below: 

• Specifying that a reference or grant of jurisdiction to a “district court” in the Texas Business Organizations Code (TBOC) also constitutes a reference or grant of concurrent jurisdiction to the new Texas business court.
• Authorizing notice of an action by less than unanimous written consent of owners of a Texas entity to the nonconsenting owners through a publicly available electronic resource.
• Authorizing Texas corporations, and other organizations to which TBOC Sec. 7.001(a)–(c) applies, to include provisions in the certificate of formation that exculpates officers from monetary liability for breaches of duty of due care to the same extent that governing persons can be exculpated.
• Specifying that for-profit and nonprofit Texas corporations may retroactively ratify a transaction that was ineffective because of a failure to file with the Texas Secretary of State; a filing instrument that was required to complete the effectiveness of the transaction.
• Authorizing the board of directors of a for-profit corporation, without shareholder approval, to effect certain limited amendments to the corporation’s certificate of formation, including forward and reverse stock splits, subject to specified conditions.
• Authorizing the governing authority to approve a plan, agreement, instrument, or other document in substantially final form and subsequently to ratify, with retroactive effect, the final form of such document before the effectiveness of the filing of such document, or a certificate referencing it, with the Secretary of State.
• Recognizing that owners in a domestic entity that is party to a merger or interest exchange may appoint a representative to represent them in enforcing the plan of merger or exchange.

Texas-Based Stock Exchanges

Three separate stock exchanges have recently announced new or expanded operations in Texas.