Sec. 21.901. DEFINITIONS. In this subchapter:
(1) "Corporate statute," with respect to an action or filing, means this code, the former Texas Business Corporation Act, or any predecessor statute of this state that governed the action or the filing.
(2) "Defective corporate act" means:
(A) an overissue;
(B) an election or appointment of directors that is void or voidable due to a failure of authorization; or
(C) any act or transaction purportedly taken by or on behalf of the corporation that is, and at the time the act or transaction was purportedly taken would have been, within the power of a corporation to take under the corporate statute, but is void or voidable due to a failure of authorization.
(3) "District court" means a district court in:
(A) the county in which the corporation's principal office in this state is located; or
(B) the county in which the corporation's registered office in this state is located, if the corporation does not have a principal office in this state.
(4) "Failure of authorization" means the failure to authorize or effect an act or transaction in compliance with the provisions of the corporate statute, the governing documents of the corporation, or any plan or agreement to which the corporation is a party, if and to the extent the failure would render the act or transaction void or voidable.
(5) "Overissue" means the purported issuance of:
(A) shares of a class or series in excess of the number of shares of that class or series that the corporation has the power to issue under the corporate statute at the time of issuance; or
(B) shares of any class or series that are not at the time authorized for issuance by the governing documents of the corporation.
(6) "Putative shares" means the shares of any class or series of the corporation, including shares issued on exercise of options, rights, warrants, or other securities convertible into shares of the corporation, or interests with respect to the shares that were created or issued pursuant to a defective corporate act, that:
(A) would constitute valid shares, if not for a failure of authorization; or
(B) cannot be determined by the board of directors to be valid shares.
(7) "Time of the defective corporate act" means the date and time the defective corporate act was purported to have been taken.
(8) "Validation effective time" or "effective time of the validation," with respect to any defective corporate act ratified under this subchapter, means the later of:
(A) the time at which the resolution submitted to the shareholders for adoption under Section 21.905 is adopted by the shareholders or, if no shareholder approval is required for adoption, the time at which the notice required by Section 21.911 is given; or
(B) the time at which any certificate of validation filed under Section 21.908 takes effect in accordance with Chapter 4.
(9) "Valid shares" means the shares of any class or series of the corporation that have been authorized and validly issued in accordance with the corporate statute.
Added by Acts 2015, 84th Leg., R.S., Ch. 32 (S.B. 860), Sec. 30, eff. September 1, 2015.
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