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Statutes > Texas > Business-organizations-code > Title-7-professional-entities > Chapter-301-provisions-relating-to-professional-entities
BUSINESS ORGANIZATIONS CODE
TITLE 7. PROFESSIONAL ENTITIES
CHAPTER 301. PROVISIONS RELATING TO PROFESSIONAL ENTITIES
Sec. 301.001. APPLICABILITY OF TITLE. (a) This title applies
only to a professional entity or foreign professional entity.
(b) This title does not affect:
(1) the professional or confidential relationship between a
person who provides a professional service and the recipient of
that service; or
(2) a person's legal remedies against another person who commits
an error, omission, negligent or incompetent act, or malfeasance
while providing a professional service.
(c) This title does not apply to a partnership, including a
limited liability partnership.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 134, eff. September 1, 2007.
Sec. 301.002. CONFLICTS OF LAW. This title prevails over a
conflicting provision of Title 1, 2, or 3.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.003. DEFINITIONS. In this title:
(1) "Licensed mental health professional" means a person, other
than a physician, who is licensed by the state to engage in the
practice of psychology or psychiatric nursing or to provide
professional therapy or counseling services.
(2) "Professional association" means an association, as
distinguished from either a partnership or a corporation, that
is:
(A) formed for the purpose of providing the professional service
rendered by a doctor of medicine, doctor of osteopathy, doctor of
podiatry, dentist, chiropractor, optometrist, therapeutic
optometrist, veterinarian, or licensed mental health
professional; and
(B) governed as a professional entity under this title.
(3) "Professional corporation" means a corporation that is:
(A) formed for the purpose of providing a professional service,
other than the practice of medicine by physicians, surgeons, or
other doctors of medicine, that by law a corporation governed by
Title 2 is prohibited from rendering; and
(B) governed as a professional entity under this title.
(4) "Professional entity" means a professional association,
professional corporation, or professional limited liability
company.
(5) "Professional individual," with respect to a professional
entity, means an individual who is licensed to provide in this
state or another jurisdiction the same professional service as is
rendered by that professional entity.
(6) "Professional limited liability company" means a limited
liability company formed for the purpose of providing a
professional service and governed as a professional entity under
this title.
(7) "Professional organization," with respect to a professional
corporation or a professional limited liability company, means a
person other than an individual, whether nonprofit, for-profit,
domestic, or foreign and including a nonprofit corporation or
nonprofit association, that renders the same professional service
as the professional corporation or professional limited liability
company only through owners, members, managerial officials,
employees, or agents, each of whom is a professional individual
or professional organization.
(8) "Professional service" means any type of service that
requires, as a condition precedent to the rendering of the
service, the obtaining of a license in this state, including the
personal service rendered by an architect, attorney, certified
public accountant, dentist, physician, public accountant, or
veterinarian.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2005, 79th Leg., Ch.
64, Sec. 97, eff. January 1, 2006.
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 135, eff. September 1, 2007.
Sec. 301.004. AUTHORIZED PERSON. For purposes of this title, a
person is an authorized person with respect to:
(1) a professional association if the person is a professional
individual; and
(2) a professional corporation or a professional limited
liability company if the person is a professional individual or
professional organization.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.005. APPLICATION FOR REGISTRATION OF FOREIGN
PROFESSIONAL ENTITY. (a) When required by Chapter 9, a foreign
professional entity must file an application for registration to
transact business in this state.
(b) The secretary of state may accept an application filed under
Subsection (a) only if:
(1) the name and purpose of the foreign professional entity
stated in the application comply with this title and Chapters 2
and 5; and
(2) the application states that the jurisdiction of formation of
the foreign professional entity permits reciprocal admission of
an entity formed under this code.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.006. LICENSE REQUIRED TO PROVIDE PROFESSIONAL SERVICE.
(a) A professional association or foreign professional
association may provide a professional service in this state only
through owners, managerial officials, employees, or agents, each
of whom:
(1) is a professional individual; and
(2) is licensed in this state to provide the same professional
service provided by the entity.
(b) A professional entity or foreign professional entity, other
than a professional association or foreign professional
association, may provide a professional service in this state
only through owners, managerial officials, employees, or agents,
each of whom is an authorized person.
(c) An individual may not, under the guise of employment,
provide a professional service in this state unless the
individual is licensed to provide the professional service under
the laws of this state.
(d) This section may not be construed to prohibit a professional
entity or foreign professional entity from employing nurses or
from employing individuals who do not, according to general
custom and practice, ordinarily provide a professional service,
including clerks, secretaries, bookkeepers, technicians, or
assistants. To the extent this subsection conflicts with any
other law, this subsection controls.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2005, 79th Leg., Ch.
64, Sec. 98, eff. January 1, 2006.
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 136, eff. September 1, 2007.
Sec. 301.007. CERTAIN REQUIREMENTS TO BE OWNER, GOVERNING
PERSON, OR OFFICER. (a) A person may be an owner of a
professional entity or a governing person of a professional
limited liability company only if the person is an authorized
person.
(b) An individual may be an officer of a professional entity or
a governing person of a professional association or professional
corporation only if the individual is a professional individual.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.008. DUTIES AND POWERS OF OWNER OR MANAGERIAL OFFICIAL
WHO CEASES TO BE LICENSED; PURCHASE OF OWNERSHIP INTEREST. (a)
A managerial official of a professional entity who ceases to
satisfy the requirements of Section 301.007 shall promptly resign
the person's position and employment with the entity.
(b) An owner of a professional entity who ceases to be an
authorized person as required by Section 301.007 shall promptly
relinquish the person's ownership interest in the entity.
(c) A person who succeeds to the ownership interest of an owner
shall promptly relinquish the person's financial interest in the
entity if the person is not an authorized person as required by
Section 301.007.
(d) A professional entity shall purchase or cause to be
purchased the ownership interest in the entity of a person who is
required to relinquish the person's financial interest in the
entity under this section. The price and terms of a purchase of
an ownership interest required under this subsection may be
provided by the governing documents of the entity or an
applicable agreement.
(e) A person who owns all of the outstanding ownership interests
in a professional entity but is required under this section to
relinquish the person's financial interest in the entity may act
as a managerial official or owner of the entity only for the
purpose of winding up the affairs of the entity, including
selling the outstanding ownership interests and other assets of
the entity.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.009. TRANSFER OF OWNERSHIP INTEREST. Except as limited
by the governing documents of the professional entity or an
applicable agreement, an ownership interest in a professional
entity may be transferred only to:
(1) an owner of the entity;
(2) the entity itself; or
(3) an authorized person.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.010. LIABILITY. (a) A professional entity is jointly
and severally liable for an error, omission, negligent or
incompetent act, or malfeasance committed by a person who:
(1) is an owner, managerial official, employee, or agent of the
entity; and
(2) while providing a professional service for the entity or
during the course of the person's employment, commits the error,
omission, negligent or incompetent act, or malfeasance.
(b) An owner, managerial official, employee, or agent of a
professional entity other than an owner, managerial official,
employee, or agent liable under Subsection (a) is not subject to
the same liability imposed on the professional entity under this
section.
(c) If a person described by Subsection (a) is a professional
organization, the professional organization and the professional
entity are jointly and severally liable for the error, omission,
negligent or incompetent act, or malfeasance committed by the
person, or the person's owner, member, managerial official,
employee, or agent, while providing a professional service for
the professional entity.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.011. EXEMPTION FROM SECURITIES LAWS. (a) A sale,
issuance, or offer for sale of an ownership interest in a
professional entity to a person authorized under this title to
own an ownership interest in the professional entity is exempt
from any state law, other than this code, that regulates the
sale, issuance, or offer for sale of securities.
(b) A transaction described by Subsection (a) does not require
the approval of or other action by a state official or regulatory
agency authorized to regulate the sale, issuance, or offer for
sale of securities.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.012. JOINT PRACTICE BY CERTAIN PROFESSIONALS. (a)
Persons licensed as doctors of medicine and persons licensed as
doctors of osteopathy by the Texas State Board of Medical
Examiners and persons licensed as podiatrists by the Texas State
Board of Podiatric Medical Examiners may jointly form and own a
professional association or a professional limited liability
company to perform professional services that fall within the
scope of practice of those practitioners.
(b) Professionals, other than physicians, engaged in related
mental health fields such as psychology, clinical social work,
licensed professional counseling, and licensed marriage and
family therapy may form a professional entity that is jointly
owned by those practitioners to perform professional services
that fall within the scope of practice of those practitioners.
(c) Persons licensed as doctors of medicine and persons licensed
as doctors of osteopathy by the Texas State Board of Medical
Examiners and persons licensed as optometrists or therapeutic
optometrists by the Texas Optometry Board may, subject to the
provisions regulating those professionals, jointly form and own a
professional association or a professional limited liability
company to perform professional services that fall within the
scope of practice of those practitioners.
(d) Only a physician, optometrist, or therapeutic optometrist
may have an ownership interest in a professional association or
professional limited liability company formed under Subsection
(c).
(e) An entity formed under Subsection (c) is not prohibited from
making one or more payments to an owner's estate following the
owner's death under an agreement with the owner or as otherwise
authorized or required by law.
(f) When doctors of medicine, osteopathy, and podiatry, or
doctors of medicine, osteopathy, and optometry or therapeutic
optometry, or mental health professionals form a professional
entity as provided by Subsections (a), (b), and (c), the
authority of each of the practitioners is limited by the scope of
practice of the respective practitioners and none can exercise
control over the other's clinical authority granted by their
respective licenses, either through agreements, bylaws,
directives, financial incentives, or other arrangements that
would assert control over treatment decisions made by the
practitioner.
(g) The state agencies exercising regulatory control over
professions to which this section applies continue to exercise
regulatory authority over their respective licenses.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
State Codes and Statutes
Statutes > Texas > Business-organizations-code > Title-7-professional-entities > Chapter-301-provisions-relating-to-professional-entities
BUSINESS ORGANIZATIONS CODE
TITLE 7. PROFESSIONAL ENTITIES
CHAPTER 301. PROVISIONS RELATING TO PROFESSIONAL ENTITIES
Sec. 301.001. APPLICABILITY OF TITLE. (a) This title applies
only to a professional entity or foreign professional entity.
(b) This title does not affect:
(1) the professional or confidential relationship between a
person who provides a professional service and the recipient of
that service; or
(2) a person's legal remedies against another person who commits
an error, omission, negligent or incompetent act, or malfeasance
while providing a professional service.
(c) This title does not apply to a partnership, including a
limited liability partnership.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 134, eff. September 1, 2007.
Sec. 301.002. CONFLICTS OF LAW. This title prevails over a
conflicting provision of Title 1, 2, or 3.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.003. DEFINITIONS. In this title:
(1) "Licensed mental health professional" means a person, other
than a physician, who is licensed by the state to engage in the
practice of psychology or psychiatric nursing or to provide
professional therapy or counseling services.
(2) "Professional association" means an association, as
distinguished from either a partnership or a corporation, that
is:
(A) formed for the purpose of providing the professional service
rendered by a doctor of medicine, doctor of osteopathy, doctor of
podiatry, dentist, chiropractor, optometrist, therapeutic
optometrist, veterinarian, or licensed mental health
professional; and
(B) governed as a professional entity under this title.
(3) "Professional corporation" means a corporation that is:
(A) formed for the purpose of providing a professional service,
other than the practice of medicine by physicians, surgeons, or
other doctors of medicine, that by law a corporation governed by
Title 2 is prohibited from rendering; and
(B) governed as a professional entity under this title.
(4) "Professional entity" means a professional association,
professional corporation, or professional limited liability
company.
(5) "Professional individual," with respect to a professional
entity, means an individual who is licensed to provide in this
state or another jurisdiction the same professional service as is
rendered by that professional entity.
(6) "Professional limited liability company" means a limited
liability company formed for the purpose of providing a
professional service and governed as a professional entity under
this title.
(7) "Professional organization," with respect to a professional
corporation or a professional limited liability company, means a
person other than an individual, whether nonprofit, for-profit,
domestic, or foreign and including a nonprofit corporation or
nonprofit association, that renders the same professional service
as the professional corporation or professional limited liability
company only through owners, members, managerial officials,
employees, or agents, each of whom is a professional individual
or professional organization.
(8) "Professional service" means any type of service that
requires, as a condition precedent to the rendering of the
service, the obtaining of a license in this state, including the
personal service rendered by an architect, attorney, certified
public accountant, dentist, physician, public accountant, or
veterinarian.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2005, 79th Leg., Ch.
64, Sec. 97, eff. January 1, 2006.
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 135, eff. September 1, 2007.
Sec. 301.004. AUTHORIZED PERSON. For purposes of this title, a
person is an authorized person with respect to:
(1) a professional association if the person is a professional
individual; and
(2) a professional corporation or a professional limited
liability company if the person is a professional individual or
professional organization.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.005. APPLICATION FOR REGISTRATION OF FOREIGN
PROFESSIONAL ENTITY. (a) When required by Chapter 9, a foreign
professional entity must file an application for registration to
transact business in this state.
(b) The secretary of state may accept an application filed under
Subsection (a) only if:
(1) the name and purpose of the foreign professional entity
stated in the application comply with this title and Chapters 2
and 5; and
(2) the application states that the jurisdiction of formation of
the foreign professional entity permits reciprocal admission of
an entity formed under this code.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.006. LICENSE REQUIRED TO PROVIDE PROFESSIONAL SERVICE.
(a) A professional association or foreign professional
association may provide a professional service in this state only
through owners, managerial officials, employees, or agents, each
of whom:
(1) is a professional individual; and
(2) is licensed in this state to provide the same professional
service provided by the entity.
(b) A professional entity or foreign professional entity, other
than a professional association or foreign professional
association, may provide a professional service in this state
only through owners, managerial officials, employees, or agents,
each of whom is an authorized person.
(c) An individual may not, under the guise of employment,
provide a professional service in this state unless the
individual is licensed to provide the professional service under
the laws of this state.
(d) This section may not be construed to prohibit a professional
entity or foreign professional entity from employing nurses or
from employing individuals who do not, according to general
custom and practice, ordinarily provide a professional service,
including clerks, secretaries, bookkeepers, technicians, or
assistants. To the extent this subsection conflicts with any
other law, this subsection controls.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2005, 79th Leg., Ch.
64, Sec. 98, eff. January 1, 2006.
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 136, eff. September 1, 2007.
Sec. 301.007. CERTAIN REQUIREMENTS TO BE OWNER, GOVERNING
PERSON, OR OFFICER. (a) A person may be an owner of a
professional entity or a governing person of a professional
limited liability company only if the person is an authorized
person.
(b) An individual may be an officer of a professional entity or
a governing person of a professional association or professional
corporation only if the individual is a professional individual.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.008. DUTIES AND POWERS OF OWNER OR MANAGERIAL OFFICIAL
WHO CEASES TO BE LICENSED; PURCHASE OF OWNERSHIP INTEREST. (a)
A managerial official of a professional entity who ceases to
satisfy the requirements of Section 301.007 shall promptly resign
the person's position and employment with the entity.
(b) An owner of a professional entity who ceases to be an
authorized person as required by Section 301.007 shall promptly
relinquish the person's ownership interest in the entity.
(c) A person who succeeds to the ownership interest of an owner
shall promptly relinquish the person's financial interest in the
entity if the person is not an authorized person as required by
Section 301.007.
(d) A professional entity shall purchase or cause to be
purchased the ownership interest in the entity of a person who is
required to relinquish the person's financial interest in the
entity under this section. The price and terms of a purchase of
an ownership interest required under this subsection may be
provided by the governing documents of the entity or an
applicable agreement.
(e) A person who owns all of the outstanding ownership interests
in a professional entity but is required under this section to
relinquish the person's financial interest in the entity may act
as a managerial official or owner of the entity only for the
purpose of winding up the affairs of the entity, including
selling the outstanding ownership interests and other assets of
the entity.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.009. TRANSFER OF OWNERSHIP INTEREST. Except as limited
by the governing documents of the professional entity or an
applicable agreement, an ownership interest in a professional
entity may be transferred only to:
(1) an owner of the entity;
(2) the entity itself; or
(3) an authorized person.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.010. LIABILITY. (a) A professional entity is jointly
and severally liable for an error, omission, negligent or
incompetent act, or malfeasance committed by a person who:
(1) is an owner, managerial official, employee, or agent of the
entity; and
(2) while providing a professional service for the entity or
during the course of the person's employment, commits the error,
omission, negligent or incompetent act, or malfeasance.
(b) An owner, managerial official, employee, or agent of a
professional entity other than an owner, managerial official,
employee, or agent liable under Subsection (a) is not subject to
the same liability imposed on the professional entity under this
section.
(c) If a person described by Subsection (a) is a professional
organization, the professional organization and the professional
entity are jointly and severally liable for the error, omission,
negligent or incompetent act, or malfeasance committed by the
person, or the person's owner, member, managerial official,
employee, or agent, while providing a professional service for
the professional entity.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.011. EXEMPTION FROM SECURITIES LAWS. (a) A sale,
issuance, or offer for sale of an ownership interest in a
professional entity to a person authorized under this title to
own an ownership interest in the professional entity is exempt
from any state law, other than this code, that regulates the
sale, issuance, or offer for sale of securities.
(b) A transaction described by Subsection (a) does not require
the approval of or other action by a state official or regulatory
agency authorized to regulate the sale, issuance, or offer for
sale of securities.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.012. JOINT PRACTICE BY CERTAIN PROFESSIONALS. (a)
Persons licensed as doctors of medicine and persons licensed as
doctors of osteopathy by the Texas State Board of Medical
Examiners and persons licensed as podiatrists by the Texas State
Board of Podiatric Medical Examiners may jointly form and own a
professional association or a professional limited liability
company to perform professional services that fall within the
scope of practice of those practitioners.
(b) Professionals, other than physicians, engaged in related
mental health fields such as psychology, clinical social work,
licensed professional counseling, and licensed marriage and
family therapy may form a professional entity that is jointly
owned by those practitioners to perform professional services
that fall within the scope of practice of those practitioners.
(c) Persons licensed as doctors of medicine and persons licensed
as doctors of osteopathy by the Texas State Board of Medical
Examiners and persons licensed as optometrists or therapeutic
optometrists by the Texas Optometry Board may, subject to the
provisions regulating those professionals, jointly form and own a
professional association or a professional limited liability
company to perform professional services that fall within the
scope of practice of those practitioners.
(d) Only a physician, optometrist, or therapeutic optometrist
may have an ownership interest in a professional association or
professional limited liability company formed under Subsection
(c).
(e) An entity formed under Subsection (c) is not prohibited from
making one or more payments to an owner's estate following the
owner's death under an agreement with the owner or as otherwise
authorized or required by law.
(f) When doctors of medicine, osteopathy, and podiatry, or
doctors of medicine, osteopathy, and optometry or therapeutic
optometry, or mental health professionals form a professional
entity as provided by Subsections (a), (b), and (c), the
authority of each of the practitioners is limited by the scope of
practice of the respective practitioners and none can exercise
control over the other's clinical authority granted by their
respective licenses, either through agreements, bylaws,
directives, financial incentives, or other arrangements that
would assert control over treatment decisions made by the
practitioner.
(g) The state agencies exercising regulatory control over
professions to which this section applies continue to exercise
regulatory authority over their respective licenses.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
State Codes and Statutes
Statutes >
Texas >
Business-organizations-code >
Title-7-professional-entities >
Chapter-301-provisions-relating-to-professional-entities BUSINESS ORGANIZATIONS CODE
TITLE 7. PROFESSIONAL ENTITIES
CHAPTER 301. PROVISIONS RELATING TO PROFESSIONAL ENTITIES
Sec. 301.001. APPLICABILITY OF TITLE. (a) This title applies
only to a professional entity or foreign professional entity.
(b) This title does not affect:
(1) the professional or confidential relationship between a
person who provides a professional service and the recipient of
that service; or
(2) a person's legal remedies against another person who commits
an error, omission, negligent or incompetent act, or malfeasance
while providing a professional service.
(c) This title does not apply to a partnership, including a
limited liability partnership.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 134, eff. September 1, 2007.
Sec. 301.002. CONFLICTS OF LAW. This title prevails over a
conflicting provision of Title 1, 2, or 3.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.003. DEFINITIONS. In this title:
(1) "Licensed mental health professional" means a person, other
than a physician, who is licensed by the state to engage in the
practice of psychology or psychiatric nursing or to provide
professional therapy or counseling services.
(2) "Professional association" means an association, as
distinguished from either a partnership or a corporation, that
is:
(A) formed for the purpose of providing the professional service
rendered by a doctor of medicine, doctor of osteopathy, doctor of
podiatry, dentist, chiropractor, optometrist, therapeutic
optometrist, veterinarian, or licensed mental health
professional; and
(B) governed as a professional entity under this title.
(3) "Professional corporation" means a corporation that is:
(A) formed for the purpose of providing a professional service,
other than the practice of medicine by physicians, surgeons, or
other doctors of medicine, that by law a corporation governed by
Title 2 is prohibited from rendering; and
(B) governed as a professional entity under this title.
(4) "Professional entity" means a professional association,
professional corporation, or professional limited liability
company.
(5) "Professional individual," with respect to a professional
entity, means an individual who is licensed to provide in this
state or another jurisdiction the same professional service as is
rendered by that professional entity.
(6) "Professional limited liability company" means a limited
liability company formed for the purpose of providing a
professional service and governed as a professional entity under
this title.
(7) "Professional organization," with respect to a professional
corporation or a professional limited liability company, means a
person other than an individual, whether nonprofit, for-profit,
domestic, or foreign and including a nonprofit corporation or
nonprofit association, that renders the same professional service
as the professional corporation or professional limited liability
company only through owners, members, managerial officials,
employees, or agents, each of whom is a professional individual
or professional organization.
(8) "Professional service" means any type of service that
requires, as a condition precedent to the rendering of the
service, the obtaining of a license in this state, including the
personal service rendered by an architect, attorney, certified
public accountant, dentist, physician, public accountant, or
veterinarian.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2005, 79th Leg., Ch.
64, Sec. 97, eff. January 1, 2006.
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 135, eff. September 1, 2007.
Sec. 301.004. AUTHORIZED PERSON. For purposes of this title, a
person is an authorized person with respect to:
(1) a professional association if the person is a professional
individual; and
(2) a professional corporation or a professional limited
liability company if the person is a professional individual or
professional organization.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.005. APPLICATION FOR REGISTRATION OF FOREIGN
PROFESSIONAL ENTITY. (a) When required by Chapter 9, a foreign
professional entity must file an application for registration to
transact business in this state.
(b) The secretary of state may accept an application filed under
Subsection (a) only if:
(1) the name and purpose of the foreign professional entity
stated in the application comply with this title and Chapters 2
and 5; and
(2) the application states that the jurisdiction of formation of
the foreign professional entity permits reciprocal admission of
an entity formed under this code.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.006. LICENSE REQUIRED TO PROVIDE PROFESSIONAL SERVICE.
(a) A professional association or foreign professional
association may provide a professional service in this state only
through owners, managerial officials, employees, or agents, each
of whom:
(1) is a professional individual; and
(2) is licensed in this state to provide the same professional
service provided by the entity.
(b) A professional entity or foreign professional entity, other
than a professional association or foreign professional
association, may provide a professional service in this state
only through owners, managerial officials, employees, or agents,
each of whom is an authorized person.
(c) An individual may not, under the guise of employment,
provide a professional service in this state unless the
individual is licensed to provide the professional service under
the laws of this state.
(d) This section may not be construed to prohibit a professional
entity or foreign professional entity from employing nurses or
from employing individuals who do not, according to general
custom and practice, ordinarily provide a professional service,
including clerks, secretaries, bookkeepers, technicians, or
assistants. To the extent this subsection conflicts with any
other law, this subsection controls.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2005, 79th Leg., Ch.
64, Sec. 98, eff. January 1, 2006.
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 136, eff. September 1, 2007.
Sec. 301.007. CERTAIN REQUIREMENTS TO BE OWNER, GOVERNING
PERSON, OR OFFICER. (a) A person may be an owner of a
professional entity or a governing person of a professional
limited liability company only if the person is an authorized
person.
(b) An individual may be an officer of a professional entity or
a governing person of a professional association or professional
corporation only if the individual is a professional individual.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.008. DUTIES AND POWERS OF OWNER OR MANAGERIAL OFFICIAL
WHO CEASES TO BE LICENSED; PURCHASE OF OWNERSHIP INTEREST. (a)
A managerial official of a professional entity who ceases to
satisfy the requirements of Section 301.007 shall promptly resign
the person's position and employment with the entity.
(b) An owner of a professional entity who ceases to be an
authorized person as required by Section 301.007 shall promptly
relinquish the person's ownership interest in the entity.
(c) A person who succeeds to the ownership interest of an owner
shall promptly relinquish the person's financial interest in the
entity if the person is not an authorized person as required by
Section 301.007.
(d) A professional entity shall purchase or cause to be
purchased the ownership interest in the entity of a person who is
required to relinquish the person's financial interest in the
entity under this section. The price and terms of a purchase of
an ownership interest required under this subsection may be
provided by the governing documents of the entity or an
applicable agreement.
(e) A person who owns all of the outstanding ownership interests
in a professional entity but is required under this section to
relinquish the person's financial interest in the entity may act
as a managerial official or owner of the entity only for the
purpose of winding up the affairs of the entity, including
selling the outstanding ownership interests and other assets of
the entity.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.009. TRANSFER OF OWNERSHIP INTEREST. Except as limited
by the governing documents of the professional entity or an
applicable agreement, an ownership interest in a professional
entity may be transferred only to:
(1) an owner of the entity;
(2) the entity itself; or
(3) an authorized person.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.010. LIABILITY. (a) A professional entity is jointly
and severally liable for an error, omission, negligent or
incompetent act, or malfeasance committed by a person who:
(1) is an owner, managerial official, employee, or agent of the
entity; and
(2) while providing a professional service for the entity or
during the course of the person's employment, commits the error,
omission, negligent or incompetent act, or malfeasance.
(b) An owner, managerial official, employee, or agent of a
professional entity other than an owner, managerial official,
employee, or agent liable under Subsection (a) is not subject to
the same liability imposed on the professional entity under this
section.
(c) If a person described by Subsection (a) is a professional
organization, the professional organization and the professional
entity are jointly and severally liable for the error, omission,
negligent or incompetent act, or malfeasance committed by the
person, or the person's owner, member, managerial official,
employee, or agent, while providing a professional service for
the professional entity.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.011. EXEMPTION FROM SECURITIES LAWS. (a) A sale,
issuance, or offer for sale of an ownership interest in a
professional entity to a person authorized under this title to
own an ownership interest in the professional entity is exempt
from any state law, other than this code, that regulates the
sale, issuance, or offer for sale of securities.
(b) A transaction described by Subsection (a) does not require
the approval of or other action by a state official or regulatory
agency authorized to regulate the sale, issuance, or offer for
sale of securities.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 301.012. JOINT PRACTICE BY CERTAIN PROFESSIONALS. (a)
Persons licensed as doctors of medicine and persons licensed as
doctors of osteopathy by the Texas State Board of Medical
Examiners and persons licensed as podiatrists by the Texas State
Board of Podiatric Medical Examiners may jointly form and own a
professional association or a professional limited liability
company to perform professional services that fall within the
scope of practice of those practitioners.
(b) Professionals, other than physicians, engaged in related
mental health fields such as psychology, clinical social work,
licensed professional counseling, and licensed marriage and
family therapy may form a professional entity that is jointly
owned by those practitioners to perform professional services
that fall within the scope of practice of those practitioners.
(c) Persons licensed as doctors of medicine and persons licensed
as doctors of osteopathy by the Texas State Board of Medical
Examiners and persons licensed as optometrists or therapeutic
optometrists by the Texas Optometry Board may, subject to the
provisions regulating those professionals, jointly form and own a
professional association or a professional limited liability
company to perform professional services that fall within the
scope of practice of those practitioners.
(d) Only a physician, optometrist, or therapeutic optometrist
may have an ownership interest in a professional association or
professional limited liability company formed under Subsection
(c).
(e) An entity formed under Subsection (c) is not prohibited from
making one or more payments to an owner's estate following the
owner's death under an agreement with the owner or as otherwise
authorized or required by law.
(f) When doctors of medicine, osteopathy, and podiatry, or
doctors of medicine, osteopathy, and optometry or therapeutic
optometry, or mental health professionals form a professional
entity as provided by Subsections (a), (b), and (c), the
authority of each of the practitioners is limited by the scope of
practice of the respective practitioners and none can exercise
control over the other's clinical authority granted by their
respective licenses, either through agreements, bylaws,
directives, financial incentives, or other arrangements that
would assert control over treatment decisions made by the
practitioner.
(g) The state agencies exercising regulatory control over
professions to which this section applies continue to exercise
regulatory authority over their respective licenses.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
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