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Texas Business Organizations Code - Section 21.002. Definitions

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§ 21.002. DEFINITIONS.  In this chapter:                                    
		(1)  "Authorized share" means a share of any class the 
corporation is authorized to issue.
		(2)  "Board of directors" includes each person who is 
authorized to perform the functions of the board of directors under 
a shareholders' agreement as authorized by this chapter.
		(3)  "Cancel," with respect to an authorized share of a 
corporation, means the restoration of an issued share to the status 
of an authorized but unissued share.
		(4)  "Consuming assets corporation" means a 
corporation that:               
			(A)  is engaged in the business of exploiting 
assets subject to depletion or amortization;
			(B)  states in its certificate of formation that 
it is a consuming assets corporation;
			(C)  includes the phrase "a consuming assets 
corporation" as part of its official corporate name and gives the 
phrase equal prominence with the rest of the corporate name on the 
financial statements and certificates of ownership of the 
corporation;  and
			(D)  includes in each of the certificates of 
ownership of the corporation the sentence, "This corporation is 
permitted by law to pay dividends out of reserves that may impair 
its stated capital."
		(5)  "Corporation" or "domestic corporation" means a 
domestic for-profit corporation subject to this chapter.
		(6)(A) "Distribution" means a transfer of property, 
including cash, or issuance of debt, by a corporation to its 
shareholders in the form of:
				(i)  a dividend on any class or series of its 
outstanding shares;         
				(ii)  a purchase or redemption, directly or 
indirectly, of any of its own shares;  or
				(iii)  a payment by the corporation in 
liquidation of all or a portion of its assets.
			(B)  The term does not include:                                              
				(i)  a split-up or division of the issued 
shares of a class of a corporation into a larger number of shares 
within the same class that does not increase the stated capital of 
the corporation;  or
				(ii)  a transfer of the corporation's own 
shares or rights to acquire its own shares.
		(7)  "Foreign corporation" means a for-profit 
corporation formed under the laws of a jurisdiction other than this 
state.
		(8)  "Investment Company Act" means the Investment 
Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.), as amended.
		(9)  "Net assets" means the amount by which the total 
assets of a corporation exceed the total debts of the corporation.
		(10)  "Share dividend" means a dividend by a 
corporation that is payable in authorized but unissued shares or 
treasury shares of the corporation.  The term does not include:
			(A)  an amendment to the corporation's 
certificate of formation to change the shares of a class or series, 
with or without par value, into the same or a different number of 
shares of the same or a different class or series, with or without 
par value;  or
			(B)  a split-up or division of the issued shares 
of a class of a corporation into a larger number of shares within 
the same class that does not increase the stated capital of the 
corporation.
		(11)  "Stated capital" means the sum of:                                      
			(A)  the par value of all shares of the 
corporation with par value that have been issued;
			(B)  the consideration, as expressed in terms of 
United States dollars, determined by the corporation in the manner 
provided by Section 21.160 for all shares of the corporation 
without par value that have been issued, except that part, but not 
all, of the consideration that:
				(i)  has been actually received;  and                                       
				(ii)  the board, by resolution adopted not 
later than the 60th day after the date of issuance of those shares, 
has allocated to surplus;  and
			(C)  an amount not included in Paragraphs (A) and 
(B) that has been transferred to stated capital of the corporation, 
on the payment of a share dividend or on adoption by the board of 
directors of a resolution directing that all or part of surplus be 
transferred to stated capital, minus each reduction made as 
permitted by law.
		(12)  "Surplus" means the amount by which the net 
assets of a corporation exceed the stated capital of the 
corporation.
		(13)  "Treasury shares" means shares of a corporation 
that have been issued, and subsequently acquired by the 
corporation, that belong to the corporation and that have not been 
canceled.  The term does not include shares held by a corporation in 
a fiduciary capacity, whether directly or through a trust or 
similar arrangement.

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

Last modified: August 11, 2007