Texas Business Corporation Act - Article 2.38-3. Determination Of Net Assets, Stated Capital, And Surplus

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Art. 2.38-3. Determination of Net Assets, Stated Capital, and 
Surplus       

A. Determinations whether a corporation is insolvent and of the 
value of the net assets, and determination of stated capital, and 
surplus of the corporation, and each of their components, may, but 
is not required to, be based on:

(1) financial statements of the corporation, including without 
limitation financial statements that include subsidiary 
corporations or other corporations accounted for on a consolidated 
basis or on the equity method of accounting, that present the 
financial condition of the corporation in accordance with generally 
accepted accounting principles;

(2) financial statements prepared on the basis of accounting used 
to file the corporation's federal income tax return or any other 
accounting practices and principles that are reasonable in the 
circumstances;

(3) financial information, including without limitation condensed 
or summary financial statements, that is prepared on a basis 
consistent with the financial statements referred to in Subsections 
(1) and (2) of this section;

(4) projection, forecast, or other forward looking information 
relating to the future economic performance, financial condition, 
or liquidity of the corporation that is reasonable in the 
circumstances;

(5) a fair valuation or information from any other method that is 
reasonable in the circumstances;  or

(6) any combination of the statements, valuations, or information 
authorized by this section.

B. Section A of this Article and the determinations made in 
accordance therewith do not apply to the calculation of the Texas 
franchise tax or any other tax imposed on corporations under the 
laws of this state.

Added by Acts 1987, 70th Leg., ch. 93, Sec. 16, eff. Aug. 31, 1987.  
Sec. A amended by Acts 1991, 72nd Leg., ch. 901, Sec. 14, eff. Aug. 
26, 1991.

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Last modified: August 10, 2007