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Texas Business Organizations Code - Section 10.356. Procedure For Dissent By Owners As To Actions; Perfection Of Right Of Dissent And Appraisal

Legal Research Home > Texas Lawyer > Business Organizations Code > Texas Business Organizations Code - Section 10.356. Procedure For Dissent By Owners As To Actions; Perfection Of Right Of Dissent And Appraisal

§ 10.356. PROCEDURE FOR DISSENT BY OWNERS AS TO ACTIONS;  
PERFECTION OF RIGHT OF DISSENT AND APPRAISAL.  (a) An owner of an 
ownership interest of a domestic entity subject to dissenters' 
rights who has the right to dissent and appraisal from any of the 
actions referred to in Section 10.354 may exercise that right to 
dissent and appraisal only by complying with the procedures 
specified in this subchapter.  An owner's right of dissent and 
appraisal under Section 10.354 may be exercised by an owner only 
with respect to an ownership interest that is not voted in favor of 
the action.
	(b)  To perfect the owner's rights of dissent and appraisal 
under Section 10.354, an owner:
		(1)  with respect to the ownership interest for which 
the rights of dissent and appraisal are sought:
			(A)  must vote against the action if the owner is 
entitled to vote on the action and the action is approved at a 
meeting of the owners;  and
			(B)  may not consent to the action if the action is 
approved by written consent;  and
		(2)  must give to the responsible organization a notice 
dissenting to the action that:
			(A)  is addressed to the president and secretary 
of the responsible organization;
			(B)  demands payment of the fair value of the 
ownership interests for which the rights of dissent and appraisal 
are sought;
			(C)  provides to the responsible organization an 
address to which a notice relating to the dissent and appraisal 
procedures under this subchapter may be sent;
			(D)  states the number and class of the ownership 
interests of the domestic entity owned by the owner and the fair 
value of the ownership interests as estimated by the owner;  and
			(E)  is delivered to the responsible organization 
at its principal executive offices at the following time:
				(i)  before the action is considered for 
approval, if the action is to be submitted to a vote of the owners at 
a meeting;
				(ii)  not later than the 20th day after the 
date the responsible organization sends to the owner a notice that 
the action was approved by the requisite vote of the owners, if the 
action is to be undertaken on the written consent of the owners;  or
				(iii)  not later than the 20th day after the 
date the responsible organization sends to the owner a notice that 
the merger was effected, if the action is a merger effected under 
Section 10.006.
	(c)  An owner who does not make a demand within the period 
required by Subsection (b)(2)(E) is bound by the action and is not 
entitled to exercise the rights of dissent and appraisal under 
Section 10.354.
	(d)  Not later than the 20th day after the date an owner makes 
a demand under this section, the owner must submit to the 
responsible organization any certificates representing the 
ownership interest to which the demand relates for purposes of 
making a notation on the certificates that a demand for the payment 
of the fair value of an ownership interest has been made under this 
section.  An owner's failure to submit the certificates within the 
required period has the effect of terminating, at the option of the 
responsible organization, the owner's rights to dissent and 
appraisal under Section 10.354 unless a court, for good cause 
shown, directs otherwise.
	(e)  If a domestic entity and responsible organization 
satisfy the requirements of this subchapter relating to the rights 
of owners of ownership interests in the entity to dissent to an 
action and seek appraisal of those ownership interests, an owner of 
an ownership interest who fails to perfect that owner's right of 
dissent in accordance with this subchapter may not bring suit to 
recover the value of the ownership interest or money damages 
relating to the action.

Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.                     

Last modified: August 11, 2007