Tex. Business Organizations Code § 101.463
This is the official text of Tex. Business Organizations Code § 101.463, part of Texas’s Business Organizations Code — governs the formation and operation of corporations, LLCs, and partnerships.
Not legal advice. This page reproduces the official text of a government statute for reference only. Laws change, and how a statute applies depends on your specific facts. For advice about your situation, consult a licensed attorney in your state.
§ 101.463. CLOSELY HELD LIMITED LIABILITY COMPANY.
Official statutory text
(a) In this section, "closely held limited liability company" means a limited liability company that has:
(1) fewer than 35 members; and
(2) no membership interests listed on a national securities exchange or regularly quoted in an over-the-counter market by one or more members of a national securities association.
(b) Sections 101.452-101.460 do not apply to a derivative proceeding by a member of a closely held limited liability company against a present or former governing person, member, or officer of the limited liability company. In the event the member also asserts a claim in the derivative proceeding against a person who is not a present or former governing person, member, or officer, this subsection applies only to a claim in the derivative proceeding against a present or former governing person, member, or officer.
(c) If Sections 101.452-101.460 do not apply because of Subsection (b) and if justice requires:
(1) a derivative proceeding brought by a member of a closely held limited liability company may be treated by a court as a direct action brought by the member for the member's own benefit; and
(2) a recovery in a direct or derivative proceeding by a member may be paid directly to the plaintiff or to the limited liability company if necessary to protect the interests of creditors or other members of the limited liability company.
(d) Other provisions of state law govern whether a member has a direct cause of action or right to sue a governing person, member, or officer, and this section may not be construed to create that direct cause of action or right to sue.
(1) fewer than 35 members; and
(2) no membership interests listed on a national securities exchange or regularly quoted in an over-the-counter market by one or more members of a national securities association.
(b) Sections 101.452-101.460 do not apply to a derivative proceeding by a member of a closely held limited liability company against a present or former governing person, member, or officer of the limited liability company. In the event the member also asserts a claim in the derivative proceeding against a person who is not a present or former governing person, member, or officer, this subsection applies only to a claim in the derivative proceeding against a present or former governing person, member, or officer.
(c) If Sections 101.452-101.460 do not apply because of Subsection (b) and if justice requires:
(1) a derivative proceeding brought by a member of a closely held limited liability company may be treated by a court as a direct action brought by the member for the member's own benefit; and
(2) a recovery in a direct or derivative proceeding by a member may be paid directly to the plaintiff or to the limited liability company if necessary to protect the interests of creditors or other members of the limited liability company.
(d) Other provisions of state law govern whether a member has a direct cause of action or right to sue a governing person, member, or officer, and this section may not be construed to create that direct cause of action or right to sue.
Status: in_force · Read it on the official government site
Dealing with a business matter in Texas?
See all Texas Business lawyers
About this page: Statute text is reproduced from official government publishers via the
Open US Law dataset
(Vaquill AI, snapshot v2026.08, CC BY 4.0). Primary legislative text like this is public domain under the government-edicts doctrine
(Georgia v. Public.Resource.Org, 2020). We link every section back to its official source so you can verify it independently.