1. (a) Organizational form. When any licensee desires to change the organizational form of its business (e.g., from proprietorship to corporation), the licensee must advise the commissioner in writing of the change within 10 calendar days by filing the appropriate fees and transfer application documents as provided in this title. In addition, the licensee shall submit a copy of the relevant portions of the organizational document for the new entity (e.g., the articles of incorporation) addressing the ownership and management of the new entity. Failure to meet the application filing deadline does not invalidate transactions unless the agency has obtained a contrary finding through the administrative process.
2. (b) Merger. A merger of a licensee is a change of ownership that results in a new or different surviving entity and requires the filing of a transfer application pursuant to this title. A merger of the parent entity of a licensee that leads to the creation of a new entity requires a transfer application pursuant to this title. A merger of the licensee's parent entity resulting in a different surviving parent entity requires a transfer application pursuant to this title. Mergers or transfers of other entities with a beneficial interest beyond the parent entity level only require notification within 10 calendar days. Failure to meet the application or notification filing deadline does not invalidate transactions unless the agency has obtained a contrary finding through the administrative process.

3. (c) Proportionate ownership.

   1. (1) When a change in proportionate ownership results in the exact same owners still owning the business, a transfer will not be required, even if some of those same owners have a change in proportionate ownership resulting in control of 10% or more of the business where it did not exist previously. Such a proportional change in ownership among the current owners does not require the filing of a transfer application, but does require notification when the cumulative ownership change to a single entity or individual amounts to 5% or greater. No later than 10 calendar days following the actual change, the licensee is required to complete and submit a Notification of Proportionate Ownership Change form as prescribed by the commissioner and pay an appropriate fee as outlined in §84.110 of this title (relating to Fees).
   2. (2) This subsection does not apply to a publicly-held corporation that has filed with the agency the most recent 10K or 10Q filing of the licensee or the publicly-held parent corporation.
   3. (3) Failure to meet the notification filing deadline does not invalidate transactions unless the agency has obtained a contrary finding through the administrative process.

Source Note:The provisions of this §84.105 adopted to be effective August 31, 2006, 31 TexReg 6652.