Texas Business Corporation Act - Article 2.13. Series Of Shares Established By Board Of Directors
Legal Research Home >
Texas Lawyer > Business Corporation Act > Texas Business Corporation Act - Article 2.13. Series Of Shares Established By Board Of Directors
Art. 2.13. Series of Shares Established by Board of Directors
A. If the articles of incorporation shall expressly vest such
authority in the board of directors, then the board of directors
shall have authority to establish series of unissued shares of any
class by fixing and determining the designations, preferences,
limitations, and relative rights, including voting rights, of the
shares of any series so established to the same extent that such
designations, preferences, limitations, and relative rights could
be stated if fully set forth in the articles of incorporation, but
subject to and within the limitations set forth in the articles of
incorporation. In order to establish a series, where authority so
to do is contained in the articles of incorporation, the board of
directors shall adopt a resolution setting forth the designation of
the series and fixing and determining the designations,
preferences, limitations and relative rights, including voting
rights, thereof or so much thereof as shall not be fixed and
determined by the articles of incorporation.
B. If the articles of incorporation shall expressly vest authority
in the board of directors to establish series of unissued shares of
a class and do not expressly restrict the board of directors from
increasing or decreasing the number of shares of such a series, then
the board of directors shall have authority to increase or decrease
the number of shares within each such series; provided, however,
that the board of directors may not decrease the number of shares
within a series to less than the number of shares within such series
that are then issued.
In order to so increase or decrease the number of shares of a
series, the board of directors shall adopt a resolution fixing and
determining the new number of shares of each series in which the
number of shares is increased or decreased. In case the number of
shares of a series shall be so decreased, the shares by which the
series is decreased shall resume the status of authorized but
unissued shares of the class of shares from which such series was
established, unless otherwise provided in the articles of
incorporation or the terms of such class or series.
C. If the articles of incorporation shall expressly vest authority
in the board of directors to establish series of unissued shares,
then if no shares of a series established by resolution of the board
of directors are outstanding, either because none were issued or
because no issued shares of such series remain outstanding or held
as treasury shares, the board of directors shall have authority to
eliminate from the articles of incorporation such series and all
references to such series contained therein. In order to eliminate
such series and such references from the articles of incorporation,
the board of directors shall adopt a resolution eliminating such
series and all reference to such series from the articles of
incorporation. The shares of any such eliminated series shall
resume the status of authorized but unissued shares of the class of
shares from which such series was established, unless otherwise
provided in the articles of incorporation.
D. Prior to the issuance of any shares of a series established by
resolution adopted by the board of directors, and prior to the
issuance of any shares of a series in which the number of shares has
been increased or decreased by resolution adopted by the board of
directors, if such issuance is the first issuance of shares of such
series since such resolution was adopted, and in order to eliminate
from the articles of incorporation a series of shares and all
references to such series contained therein, the corporation shall
file with the Secretary of State a statement setting forth:
(1) The name of the corporation.
(2) If the statement relates to the establishment of a series of
shares, a copy of the resolution establishing and designating the
series and fixing and determining the preferences, limitations, and
relative rights thereof.
(3) If the statement relates to an increase or decrease in the
number of shares of any series, a copy of the resolution fixing and
determining the new number of shares of each series in which the
number of shares is increased or decreased.
(4) If the statement relates to the elimination of a series of
shares and all references thereto from the articles of
incorporation, a copy of the resolution eliminating such series and
all references to such series from the articles of incorporation.
(5) The date of adoption of such resolution.
(6) That such resolution was duly adopted by all necessary action on
the part of the corporation.
E. If the articles of incorporation expressly authorize the board
of directors to establish series of unissued shares of a class and
if no shares of a series established by resolution of the board of
directors have been issued, the board of directors may amend the
designations, preferences, limitations, and relative rights,
including voting rights, of the series, unless otherwise provided
in the articles of incorporation. To amend the designations,
preferences, limitations, and relative rights of a series, the
board of directors shall adopt a resolution amending the
designations, preferences, limitations, and relative rights of the
series. Before the issuance of any shares of the series, the
corporation shall file with the secretary of state a statement
setting forth:
(1) The name of the corporation.
(2) That no shares of the series have been issued.
(3) If the designation of the series is being changed, a statement
of the original designation and the new designation.
(4) A copy of the resolution amending the designations,
preferences, limitations, or relative rights of the series.
(5) The date of adoption of the resolution.
(6) That the resolution was adopted by all necessary action on the
part of the corporation.
F. A statement filed in accordance with Section D or E of this
article shall be executed on behalf of the corporation by an
officer. The original and a copy of the statement shall be
delivered to the Secretary of State. If the Secretary of State
finds that such statement conforms to law, he shall, when the
appropriate filing fee is paid as prescribed by law:
(1) Endorse on the original and the copy the word "Filed," and the
month, day, and year of the filing thereof.
(2) File the original in his office.
(3) Return the copy to the corporation or its representative.
G. Upon the filing of a statement described in Section D or E of this
article by the Secretary of State, the resolution establishing and
designating the series and fixing and determining the preferences,
limitations, and relative rights thereof, the resolution fixing the
new number of shares of each series in which the number of shares is
increased or decreased, the resolution eliminating a series and all
references to such series from the articles of incorporation, or
the resolution amending the preferences, limitations, and relative
rights of the series, as appropriate, shall become an amendment of
the articles of incorporation. The filing of the statement or the
filing of a restated certificate of incorporation under Article
4.07 of this Act does not prohibit the board of directors from
subsequently adopting a resolution as authorized by this article.
An amendment of the articles of incorporation effected pursuant to
this Article 2.13 is not subject to the procedure to amend the
articles of incorporation contained in Article 4.02 of this Act.
Acts 1955, 54th Leg., p. 239, ch. 64, eff. Sept. 6, 1955. Amended by
Acts 1973, 63rd Leg., p. 1489, ch. 545, Sec. 7, eff. Aug. 27, 1973;
Acts 1979, 66th Leg., p. 223, ch. 120, Sec. 25, eff. May 9, 1979;
Acts 1981, 67th Leg., p. 838, ch. 297, Sec. 13, eff. Aug. 31, 1981;
Acts 1985, 69th Leg., ch. 128, Sec. 4, eff. May 20, 1985; Acts 1987,
70th Leg., ch. 93, Sec. 6, eff. Aug. 31, 1987; Acts 1989, 71st Leg.,
ch. 801, Sec. 4, eff. Aug. 28, 1989; Acts 1991, 72nd Leg., ch. 901,
Sec. 2, eff. Aug. 26, 1991.
Sec. E amended by Acts 2003, 78th Leg., ch. 238, Sec. 5, eff. Sept.
1, 2003; Sec. F amended by Acts 2003, 78th Leg., ch. 238, Sec. 5,
eff. Sept. 1, 2003; Sec. G added by Acts 2003, 78th Leg., ch. 238,
Sec. 5, eff. Sept. 1, 2003.
Article: 2.07 2.08 2.09 2.10 2.10-1 2.11 2.12 2.13 2.14 2.14-1 2.15 2.16 2.18 2.19 2.20
Texas Lawyers
Last modified: August 10, 2007
| 