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Texas Business Corporation Act - Article 7.01. Involuntary Dissolution

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Art. 7.01. Involuntary Dissolution                                            

A. A corporation may be dissolved involuntarily by a decree of the 
district court of the county in which the registered office of the 
corporation is situated or of any district court in Travis County in 
an action filed by the Attorney General when it is established that 
it is in default in any of the following particulars:

(1) The corporation or its incorporators have failed to comply with 
a condition precedent to incorporation;  or

(2) The original articles of incorporation or any amendments 
thereof were procured through fraud;  or

(3) The corporation has continued to transact business beyond the 
scope of the purpose or purposes of the corporation as expressed in 
its articles of incorporation;  or

(4) A misrepresentation has been made of any material matter in any 
application, report, affidavit, or other document submitted by such 
corporation pursuant to this Act.

B. A corporation may be dissolved involuntarily by order of the 
Secretary of State when it is established that it is in default in 
any of the following particulars:

(1) The corporation has failed to file any report within the time 
required by law, or has failed to pay any fees, franchise taxes or 
penalties prescribed by law when the same have become due and 
payable;

(2) The corporation has failed to maintain a registered agent in 
this state as required by law;  or

(3) The corporation has failed to pay the filing fee for the 
corporation's articles of incorporation or the initial franchise 
tax deposit, or the fee or tax was paid by an instrument that was 
dishonored when presented by the state for payment.

C. (1) No corporation shall be involuntarily dissolved under 
Subsection (1) or (2) of Section B hereof unless the Secretary of 
State, or other state agency with which such report, fees, taxes, or 
penalties is required to be made, gives the corporation not less 
than 90 days notice of its neglect, delinquency, or omission by 
certified mail addressed to its registered office or to its 
principal place of business, or to the last known address of one of 
its officers or directors, or to any other known place of business 
of said corporation, and the corporation has failed prior to such 
involuntary dissolution to correct the neglect, omission or 
delinquency.

(2) When a corporation is involuntarily dissolved under Subsection 
(3) of Section B of this article, the Secretary of State shall give 
the corporation notice of the dissolution by regular mail addressed 
to its registered office, its principal place of business, the last 
known address of one of its officers or directors, or any other 
known place of business of the corporation.

D. Whenever a corporation has given cause for involuntary 
dissolution and has failed to correct the neglect, omission or 
delinquency as provided in Sections B and C, the Secretary of State 
shall thereupon dissolve the corporation by issuing a certificate 
of involuntary dissolution, which shall include the fact of such 
involuntary dissolution and the date and cause thereof.  The 
original of such certificate shall be placed in his office and a 
copy thereof mailed to the corporation at its registered office, or 
to its principal place of business, or the last known address of one 
of its officers or directors, or to any other known place of 
business of said corporation.  Upon the issuance of such 
certificate of involuntary dissolution, the existence of the 
corporation shall cease, except for purposes otherwise provided by 
law.

E. Any corporation dissolved by the Secretary of State under the 
provisions of Section B of this article may be reinstated by the 
Secretary of State at any time within a period of 36 months from the 
date of such dissolution, upon approval of an application for 
reinstatement signed by an officer or director of the dissolved 
corporation.  Such application shall be filed by the Secretary of 
State whenever it is established to the Secretary's satisfaction 
that in fact there was no cause for the dissolution, or whenever the 
neglect, omission or delinquency resulting in dissolution has been 
corrected and payment of all fees, taxes, penalties and interest 
due thereon which accrued before the dissolution plus an amount 
equal to the total taxes from the date of dissolution to the date of 
reinstatement which would have been payable had the corporation not 
been dissolved.  A reinstatement filing fee of $50 shall accompany 
the application for reinstatement.

Reinstatement shall not be authorized if the corporate name is the 
same as or deceptively similar to a corporate, limited partnership, 
or limited liability company name already on file or reserved or 
registered, unless the corporation being reinstated 
contemporaneously amends the articles of incorporation to change 
its name.

When the application for reinstatement is approved and filed by the 
Secretary of State, the corporate existence shall be deemed to have 
continued without interruption from the date of dissolution except 
the reinstatement shall have no effect upon any issue of personal 
liability of the directors, officers, or agents of the corporation 
during the period between dissolution and reinstatement.

F. When a corporation is convicted of a felony or when a high 
managerial agent is convicted of a felony in the conduct of the 
affairs of the corporation, the Attorney General may file an action 
to involuntarily dissolve the corporation in a district court of 
the county in which the registered office of the corporation is 
situated or in a district court of Travis County.  The court may 
dissolve the corporation involuntarily if it is established that:

(1) The corporation, or a high managerial agent acting in behalf of 
the corporation, has engaged in a persistent course of felonious 
conduct;  and

(2) To prevent future felonious conduct of the same character, the 
public interest requires such dissolution.

G. Article 7.02 of this Act does not apply to Section F of this 
article.    

Acts 1955, 54th Leg., p. 239, ch. 64, eff. Sept. 6, 1955.  Amended by 
Acts 1969, 61st Leg., p. 2484, ch. 835, Sec. 3, eff. June 18, 1969;  
Acts 1973, 63rd Leg., p. 989, ch. 399, Sec. 2(K), eff. Jan. 1, 1974;  
Acts 1981, 67th Leg., p. 843, ch. 297, Sec. 25, eff. Aug. 31, 1981;  
Acts 1997, 75th Leg., ch. 375, Sec. 36, eff. Sept. 1, 1997.

Last modified: August 11, 2007