How Senate Bill 29 Reshapes Texas Business Law

If you own or work for a small to mid-sized business (SMB) in Texas, it’s important to understand recent laws that went into effect that can impact internal and external business disputes. Senate Bill (SB) 29 has recently altered how Texas businesses operate. More specifically, it offers more protections and flexibility for businesses.

If you’re navigating a business issue of some sort, it can be helpful to work with a Texas business lawyer. At Murrah & Killough, PLLC, we’re committed to providing comprehensive legal services for business and commercial property owners. 

Call Murrah & Killough, PLLC at 281-501-1601 to set up an appointment with one of our experienced Houston business lawyers. 

What Is Texas Senate Bill 29?

Texas SB 29 was signed into law in May 2025 by Governor Greg Abbott and introduced important changes to the Texas Business Organizations Code. The law is designed to offer stronger legal protections for business owners and more flexibility in how companies manage internal affairs and disputes.

These reforms are part of a broader effort to make Texas a more attractive place to start and operate a business. The law focuses on limiting liability for decision-makers, streamlining dispute resolution, and giving companies more control over how they govern themselves. 

Key provisions of SB 29 include:

• Jurisdiction control: Businesses can now designate specific Texas courts, including new business courts, to hear internal disputes.
• Business judgment rule codified: Company leaders are shielded from liability when making good-faith decisions, reducing the fear of retaliation from shareholders.
• Conflict-of-interest oversight: Independent director committees are now required to review certain insider transactions.
• LLC governance flexibility: LLC and limited partnership agreements may now redefine fiduciary duties and liability exposure for managers and members.
• Limits on shareholder record access: Shareholders can no longer access emails, texts, or social media accounts unless explicitly allowed.
• Waiver of jury trials: Businesses can include provisions waiving jury trials in internal disputes, even those involving outside parties like shareholders.
  

How Does SB 29 Impact Texas Businesses?

SB 29 changes the ways businesses can handle disputes. More specifically, it changes the threshold for liability and gives businesses more wiggle room to make difficult decisions and accomplish their goals. These legislative updates reshaped how businesses in Texas operate, particularly when it comes to resolving internal disputes and managing governance responsibilities.

Control Over Jurisdiction for Internal Disputes

Texas companies can now specify that they want specific Texas courts, including new business courts, to handle internal disputes. This allows businesses to work in a familiar court system and prevents plaintiffs from strategically choosing a forum for a dispute.

Enhanced Resolutions for Conflict-of-Interest Transactions

To avoid potential conflicts of interest, Texas law now requires companies to have committees of independent directors to review shareholder or insider transactions. This offers a clearer path for handling disputes and promoting legitimate business transactions.

Greater Flexibility for LLCs

These changes to Texas business law also impacted the power of limited liability companies (LLCs). Under these updates, LLC agreements and limited partnership agreements can alter the fiduciary duties and liabilities of:

• Managers
• Officers
• Other members

This can make structuring management simpler and potentially reduce the occurrence of governance disputes.

Higher Liability Threshold for Company Leaders

SB 29 officially codified the business judgment rule, which creates a good-faith assumption for company leaders when they make decisions for the business. Instead of just this, it can make it more difficult for shareholders and other parties to file legal cases against company leaders. 

Increased Protections Against Shareholders’ Record Inspections

Texas law now limits the types of records shareholders can inspect, which gives businesses more ability to protect confidentiality when engaged in litigation. Unless the company takes action to document communications, shareholders can’t request access to emails, social media accounts, or text messages. Our attorneys can help you figure out how this can affect your business.

Waivers for Jury Trials for Internal Disputes

Texas entities can effectively waive jury trials for internal company issues, even if they are against third parties like shareholders. On one hand, this can lead to more efficient resolutions and predictable outcomes for business owners. On the other hand, it can leave the plaintiff filing against the entity with fewer options when seeking legal recourse.

Get in Touch With a Texas Business Lawyer Today

Even with this reform, it can be helpful to work with collaborative business lawyers in Texas when handling any business dispute. Our attorneys at Murrah & Killough PLLC have experience handling business law for all forms of entities across a spectrum of industries, service industries, healthcare practices, and manufacturing.

That said, you can count on us to have the skills and knowledge to navigate your situation with ease. If you’re ready to talk about your case in more detail, reach out to our attorneys at Murrah & Killough, PLLC, to set up a consultation today. 

You can call us at 281-501-1601, or fill out an online form to get started.