Texas’s entity statutes were fragmentary before 2003. The Texas Business Corporation Act of 1955, the Texas Miscellaneous Corporation Laws Act, the Texas Non-Profit Corporation Act, the Texas Limited Liability Company Act of 1991, and several partnership-form statutes each lived as separate codes with separate definitional structures and separate procedural rules.4 H.B. 1156, 78th Leg., R.S. (Tex. 2003) consolidated those statutes into a single Texas Business Organizations Code: effective for new entities formed on or after January 1, 2006, mandatory for all Texas-domestic entities by January 1, 2010, and codified at Tex. Bus. Orgs. Code Ann. tit. 1 et seq. (West 2025).5
The 2025 reform cycle then added TBOC § 1.057i, a Texas-first source-of-law rule. The provision is narrower than the headline framing suggests: it permits managerial officials to consider law of other states in discharging fiduciary duties but specifies that failure or refusal to conform Texas-corporation conduct to the law of another state is not, standing alone, a breach.6 The operative consequence is that the TBOC instructs courts to resolve internal-affairs disputes by reference to Texas authority first, and treats out-of-state authority (most commonly Delaware Chancery and Delaware Supreme Court precedent) as persuasive rather than presumptive.
“The plain meaning of the text of this code may not be supplanted, contravened, or modified by the laws or judicial decisions of any other state.” Subsection (b) provides: “The managerial officials of a domestic entity, in exercising their powers with respect to the domestic entity, may consider the laws and judicial decisions of other states and the practices observed by entities formed in those other states. The failure or refusal of a managerial official to consider, or to conform the exercise of the managerial official’s powers to, the laws, judicial decisions, or practices of another state does not constitute or imply a breach of this code or of any duty existing under the laws of this state.” Tex. Bus. Orgs. Code Ann. § 1.057 (West 2025) (Texas-first source-of-law rule; § 1.057(a)–(b) added by S.B. 2411 § 1 (Tex. 2025); the consider-other-states rule first enacted by S.B. 29 § 2 as § 1.056 now appears at § 1.057(b), effective September 1, 2025; new § 1.056 now addresses Business Court references).
The framing matters because it inverts the conventional understanding of internal-affairs analysis. Under the standard internal-affairs doctrine articulated in VantagePoint Venture Partners 1996 v. Examen, Inc., 871 A.2d 1108 (Del. 2005), and Restatement (Second) of Conflict of Laws § 302 (Am. L. Inst. 1971), the law of the state of incorporation governs a Texas-domestic corporation’s internal affairs.7 Section 1.057 (added by S.B. 2411 § 1; carries forward the consider-other-states rule S.B. 29 first enacted at § 1.056, effective September 1, 2025) makes that “Texas-first” routing express on the Texas side.