1. (a) Subject to Subsection (b), a shareholder may not institute or maintain a derivative proceeding unless:

   1. (1) the shareholder:

      1. (A) was a shareholder of the corporation at the time of the act or omission complained of; or
      2. (B) became a shareholder by operation of law originating from a person that was a shareholder at the time of the act or omission complained of; and
   2. (2) the shareholder fairly and adequately represents the interests of the corporation in enforcing the right of the corporation.

2. (b) If the converted entity in a conversion is a corporation, a shareholder of that corporation may not institute or maintain a derivative proceeding based on an act or omission that occurred with respect to the converting entity before the date of the conversion unless:

   1. (1) the shareholder was an equity owner of the converting entity at the time of the act or omission; and
   2. (2) the shareholder fairly and adequately represents the interests of the corporation in enforcing the right of the corporation.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Acts 2005, 79th Leg., Ch. 64 (H.B. 1319), Sec. 63, eff. January 1, 2006.

Acts 2011, 82nd Leg., R.S., Ch. 93 (S.B. 1568), Sec. 1, eff. September 1, 2011.

Acts 2019, 86th Leg., R.S., Ch. 899 (H.B. 3603), Sec. 2, eff. September 1, 2019.