SUBCHAPTER A GENERAL PROVISIONS
SUBCHAPTER B FORMATION AND GOVERNING DOCUMENTS
- Texas Section 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...
- Texas Section 21.051 - No Property Right In Certificate Of Formation
A shareholder of a corporation does not have a vested property right resulting from the certificate of formation, including a provision in the certificate of...
- Texas Section 21.052 - Procedures To Adopt Amendment To Certificate Of Formation
(a) To adopt an amendment to the certificate of formation of a corporation as provided by Subchapter B, Chapter 3, the board of directors of...
- Texas Section 21.053 - Adoption Of Amendment By Board Of Directors
(a) If a corporation does not have any issued and outstanding shares, or in the case of an amendment under Subsection (b) or (c), the...
- Texas Section 21.054 - Adoption Of Amendment By Shareholders
If a corporation has issued and outstanding shares: (1) a resolution described by Section 21.052 must also direct that the proposed amendment be submitted to...
- Texas Section 21.055 - Notice Of And Meeting To Consider Proposed Amendment
(a) Each shareholder of record entitled to vote shall be given written notice containing the proposed amendment or a summary of the changes to be...
- Texas Section 21.056 - Restated Certificate Of Formation
(a) A corporation may adopt a restated certificate of formation as provided by Subchapter B, Chapter 3, by following the same procedures to amend its...
- Texas Section 21.057 - Bylaws
(a) The board of directors of a corporation shall adopt initial bylaws. (b) The bylaws may contain provisions for the regulation and management of the...
- Texas Section 21.058 - Dual Authority
Unless the certificate of formation or a bylaw adopted by the shareholders provides otherwise as to all or a part of a corporation's bylaws, a...
SUBCHAPTER C SHAREHOLDERS' AGREEMENTS
- Texas Section 21.059 - Organization Meeting
(a) This section does not apply to a corporation created as a result of a conversion or merger the plan of which states the bylaws...
- Texas Section 21.101 - Shareholders' Agreement
(a) The shareholders of a corporation may enter into an agreement that: (1) restricts the discretion or powers of the board of directors; (2) eliminates...
- Texas Section 21.102 - Term Of Agreement
Any limit on the term or duration of a shareholders' agreement under this subchapter must be set forth in the agreement. A shareholders' agreement under...
- Texas Section 21.103 - Disclosure Of Agreement; Recall Of Certain Certificates
(a) The existence of an agreement authorized by this subchapter shall be noted conspicuously on the front or back of each certificate for outstanding shares...
- Texas Section 21.104 - Effect Of Shareholders' Agreement
A shareholders' agreement that complies with this subchapter is effective among the shareholders and between the shareholders and the corporation even if the terms of...
- Texas Section 21.105 - Right Of Rescission; Knowledge Of Purchaser Of Shares
(a) A purchaser of shares who does not have knowledge at the time of purchase of the existence of a shareholders' agreement authorized by this...
- Texas Section 21.106 - Agreement Limiting Authority Of And Supplanting Board Of Directors; Liability
(a) A shareholders' agreement authorized by this subchapter that limits the discretion or powers of the board of directors or supplants the board of directors...
- Texas Section 21.107 - Liability Of Shareholder
The existence of or a performance under a shareholders' agreement authorized by this subchapter is not a ground for imposing personal liability on a shareholder...
- Texas Section 21.108 - Persons Acting In Place Of Shareholders
An organizer or a subscriber for shares may act as a shareholder with respect to a shareholders' agreement authorized by this subchapter if no shares...
- Texas Section 21.109 - Agreement Not Effective
(a) A shareholders' agreement authorized by this subchapter ceases to be effective when shares of the corporation are: (1) listed on a national securities exchange;...
SUBCHAPTER D SHARES, OPTIONS, AND CONVERTIBLE SECURITIES
- Texas Section 21.110 - Other Shareholder Agreements Permitted
This subchapter does not prohibit or impair any agreement between two or more shareholders, or between the corporation and one or more of the corporation's...
- Texas Section 21.151 - Number Of Authorized Shares
A corporation may issue the number of authorized shares stated in the corporation's certificate of formation. Acts 2003, 78th Leg., ch. 182, Sec. 1, eff....
- Texas Section 21.152 - Classes And Series Of Shares
(a) A corporation's certificate of formation may divide the corporation's authorized shares into one or more classes and may divide one or more classes into...
- Texas Section 21.153 - Designations, Preferences, Limitations, And Rights Of A Class Or Series
(a) If more than one class or series of shares is authorized under Section 21.152(d), the certificate of formation must state the designations, preferences, limitations,...
- Texas Section 21.154 - Certain Optional Characteristics Of Shares
(a) Subject to Sections 21.152 and 21.153, if authorized by the corporation's certificate of formation, a corporation may issue shares that: (1) are redeemable, at...
- Texas Section 21.155 - Series Of Shares Established By Board Of Directors
(a) If expressly authorized by the corporation's certificate of formation and subject to the certificate of formation, the board of directors of a corporation may...
- Texas Section 21.156 - Actions With Respect To Series Of Shares
(a) To effect an action authorized under Section 21.155, the corporation must file with the secretary of state a statement that contains: (1) the name...
- Texas Section 21.157 - Issuance Of Shares
(a) Except as provided by Section 21.158, a corporation may issue shares for consideration if authorized by the board of directors of the corporation. (b)...
- Texas Section 21.158 - Issuance Of Shares Under Plan Of Merger Or Conversion
(a) A converted corporation under a plan of conversion or a corporation created by a plan of merger may issue shares for consideration if authorized...
- Texas Section 21.159 - Types Of Consideration For Shares
Shares with or without par value may be issued for the following types of consideration: (1) a tangible or intangible benefit to the corporation; (2)...
- Texas Section 21.160 - Determination Of Consideration For Shares
(a) Subject to Subsection (b), consideration to be received for shares must be determined: (1) by the board of directors; (2) by a plan of...
- Texas Section 21.161 - Amount Of Consideration For Issuance Of Certain Shares
(a) Consideration to be received by a corporation for the issuance of shares with par value may not be less than the par value of...
- Texas Section 21.162 - Value And Sufficiency Of Consideration
In the absence of fraud in the transaction, the judgment of the board of directors, the shareholders, or the party approving the plan of conversion...
- Texas Section 21.163 - Issuance And Disposition Of Fractional Shares Or Scrip
(a) A corporation may: (1) issue fractions of a share, either certificated or uncertificated; (2) arrange for the disposition of fractional interests by persons entitled...
- Texas Section 21.164 - Rights Of Holders Of Fractional Shares Or Scrip
(a) A holder of a certificated or uncertificated fractional share is entitled to exercise voting rights, receive distributions, and make a claim with respect to...
- Texas Section 21.165 - Subscriptions
(a) A corporation may accept a subscription by notifying the subscriber in writing. (b) A subscription to purchase shares in a corporation in the process...
- Texas Section 21.166 - Preformation Subscription
(a) The corporation may determine the payment terms of a preformation subscription unless the payment terms are specified by the subscription. The payment terms may...
- Texas Section 21.167 - Commitment To Purchase Shares
(a) A person who contemplates the acquisition of shares in a corporation may commit to act in a specified manner with respect to the shares...
- Texas Section 21.168 - Stock Rights, Options, And Convertible Indebtedness
(a) Except as provided by the corporation's certificate of formation and regardless of whether done in connection with the issuance and sale of any other...
- Texas Section 21.169 - Terms And Conditions Of Rights And Options
(a) The terms and conditions of rights or options may include restrictions or conditions that: (1) prohibit or limit the exercise, transfer, or receipt of...
- Texas Section 21.170 - Consideration For Rights, Options, And Convertible Indebtedness
(a) In the absence of fraud in the transaction, the judgment of the board of directors of a corporation as to the adequacy of the...
- Texas Section 21.171 - Outstanding Or Treasury Shares
(a) Shares that are issued are outstanding shares unless the shares are treasury shares or are canceled. (b) If there are outstanding shares, one or...
- Texas Section 21.172 - Expenses Of Organization, Reorganization, And Financing Of Corporation
A corporation may pay or authorize to be paid from the consideration received by the corporation as payment for the corporation's shares the reasonable charges...
SUBCHAPTER E SHAREHOLDER RIGHTS AND RESTRICTIONS
- Texas Section 21.173 - Supplemental Required Records
In addition to the books and records required to be kept under Section 3.151, a corporation shall keep at its registered office or principal place...
- Texas Section 21.201 - Registered Holders As Owners; Shares Held By Nominees
(a) Except as otherwise provided by this code and subject to Chapter 8, Business & Commerce Code, a corporation may consider the person registered as...
- Texas Section 21.202 - Definition Of Shares
In Sections 21.203-21.208, "shares" includes a security: (1) that is convertible into shares; or (2) that carries a right to subscribe for or acquire shares....
- Texas Section 21.203 - No Statutory Preemptive Right Unless Provided By Certificate Of Formation
(a) Except as provided by Section 21.208, a shareholder of a corporation does not have a preemptive right under this subchapter to acquire the corporation's...
- Texas Section 21.204 - Statutory Preemptive Rights
(a) If the shareholders of a corporation have a preemptive right under this subchapter, the shareholders have a preemptive right to acquire proportional amounts of...
- Texas Section 21.205 - Waiver Of Preemptive Right
(a) A shareholder may waive a preemptive right granted to the shareholder. (b) A written waiver of a preemptive right is irrevocable regardless of whether...
- Texas Section 21.206 - Limitation On Action To Enforce Preemptive Right
(a) An action brought against a corporation, the board of directors or an officer, shareholder, or agent of the corporation, or an owner of a...
- Texas Section 21.207 - Disposition Of Shares Having Preemptive Rights
The transferee or successor of a share that has been transferred or otherwise disposed of by a shareholder of a corporation whose preemptive right to...
- Texas Section 21.208 - Preemptive Right In Existing Corporation
Subject to the certificate of formation, a shareholder of a corporation incorporated before September 1, 2003, has a preemptive right to acquire unissued or treasury...
- Texas Section 21.209 - Transfer Of Shares And Other Securities
Except as otherwise provided by this code, the shares and other securities of a corporation are transferable in accordance with Chapter 8, Business & Commerce...
- Texas Section 21.210 - Restriction On Transfer Of Shares And Other Securities
(a) A restriction on the transfer or registration of transfer of a security, or on the amount of a corporation's securities that may be owned...
- Texas Section 21.211 - Valid Restrictions On Transfer
(a) Without limiting the general powers granted by Sections 21.210 and 21.213 to impose and enforce reasonable restrictions, a restriction placed on the transfer or...
- Texas Section 21.212 - Bylaw Or Agreement Restricting Transfer Of Shares Or Other Securities
(a) A corporation that has adopted a bylaw or is a party to an agreement that restricts the transfer of the shares or other securities...
- Texas Section 21.213 - Enforceability Of Restriction On Transfer Of Certain Securities
(a) A restriction placed on the transfer or registration of the transfer of a security of a corporation is specifically enforceable against the holder, or...
- Texas Section 21.214 - Joint Ownership Of Shares
(a) If shares are registered on the books of a corporation in the names of two or more persons as joint owners with the right...
- Texas Section 21.215 - Liability For Designating Owner Of Shares
A corporation or an officer, director, employee, or agent of the corporation may not be held liable for considering the person who is registered as...
- Texas Section 21.216 - Liability Regarding Joint Ownership Of Shares
A corporation that transfers shares or makes a distribution to a surviving joint owner under Section 21.214 before the corporation has received a written claim...
- Texas Section 21.217 - Liability Of Assignee Or Transferee
An assignee or transferee of certificated shares, uncertificated shares, or a subscription for shares in good faith and without knowledge that full consideration for the...
- Texas Section 21.218 - Examination Of Records
(a) In this section, a holder of a beneficial interest in a voting trust entered into under Section 6.251 is a holder of the shares...
- Texas Section 21.219 - Annual And Interim Statements Of Corporation
(a) On written request of a shareholder of the corporation, a corporation shall mail to the shareholder: (1) the annual statements of the corporation for...
- Texas Section 21.220 - Penalty For Failure To Prepare Voting List
An officer or agent of a corporation who is in charge of the corporation's share transfer records and who does not prepare the list of...
- Texas Section 21.221 - Penalty For Failure To Provide Notice Of Meeting
If an officer or agent of a corporation is unable to comply with the duties prescribed by Sections 21.354 and 21.372 because the officer or...
- Texas Section 21.222 - Penalty For Refusal To Permit Examination Of Certain Records
(a) A corporation that refuses to allow a person to examine and make copies of account records, minutes, and share transfer records under Section 21.218...
- Texas Section 21.223 - Limitation Of Liability For Obligations
(a) A holder of shares, an owner of any beneficial interest in shares, or a subscriber for shares whose subscription has been accepted, or any...
- Texas Section 21.224 - Preemption Of Liability
The liability of a holder, beneficial owner, or subscriber of shares of a corporation, or any affiliate of such a holder, owner, or subscriber or...
- Texas Section 21.225 - Exceptions To Limitations
Section 21.223 or 21.224 does not limit the obligation of a holder, beneficial owner, subscriber, or affiliate to the obligee of the corporation if that...
SUBCHAPTER F REDUCTIONS IN STATED CAPITAL; CANCELLATION OF TREASURY SHARES
- Texas Section 21.226 - Pledgees And Trust Administrators
(a) A pledgee or other holder of shares as collateral security is not personally liable as a shareholder. (b) An executor, administrator, conservator, guardian, trustee,...
- Texas Section 21.251 - Reduction Of Stated Capital By Redemption Or Purchase Of Redeemable Shares
(a) At the time a corporation redeems or purchases the redeemable shares of the corporation, the redemption or purchase has the effect of: (1) canceling...
- Texas Section 21.252 - Cancellation Of Treasury Shares
(a) A corporation, by resolution of the board of directors of the corporation, may cancel all or part of the corporation's treasury shares at any...
- Texas Section 21.253 - Procedures For Reduction Of Stated Capital By Board Of Directors
(a) If all or part of the stated capital of a corporation is represented by shares without par value, the stated capital of the corporation...
SUBCHAPTER G DISTRIBUTIONS AND SHARE DIVIDENDS
- Texas Section 21.254 - Restriction On Reduction Of Stated Capital
The stated capital of a corporation may not be reduced under this subchapter if the amount of the aggregate stated capital of the corporation would...
- Texas Section 21.301 - Definitions
In this subchapter: (1) "Distribution limit," with respect to a distribution made by a corporation, other than a distribution described by Subdivision (2), means: (A)...
- Texas Section 21.302 - Authority For Distributions
The board of directors of a corporation may authorize a distribution and the corporation may make a distribution, subject to Section 21.303. Acts 2003, 78th...
- Texas Section 21.303 - Limitations On Distributions
(a) A corporation may not make a distribution that violates the corporation's certificate of formation. (b) Unless the distribution is made in compliance with Chapter...
- Texas Section 21.304 - Redemptions
(a) A distribution by a corporation that involves a redemption of outstanding redeemable shares of the corporation subject to redemption may be related to any...
- Texas Section 21.305 - Notice Of Redemption
(a) A notice of redemption of redeemable shares of a corporation must state: (1) the class or series of shares or part of the class...
- Texas Section 21.306 - Deposit Of Money For Redemption
(a) After the date the notice of redemption required by Section 21.305 is sent and before the day after the date set for redemption of...
- Texas Section 21.307 - Payment Of Redeemed Shares
(a) Payment of a certificated share shall be made only on the surrender of the respective share certificate. (b) A corporation may give a transfer...
- Texas Section 21.308 - Priority Of Distributions
(a) Except as provided by Subsection (b) or (c), a corporation's indebtedness that arises as a result of the declaration of a distribution and a...
- Texas Section 21.309 - Reserves, Designations, And Allocations From Surplus
(a) A corporation, by resolution of the board of directors of the corporation, may: (1) create a reserve out of the surplus of the corporation;...
- Texas Section 21.310 - Authority For Share Dividends
The board of directors of a corporation may authorize a share dividend and the corporation may pay a share dividend subject to Section 21.311 and...
- Texas Section 21.311 - Limitations On Share Dividends
A corporation may not pay a share dividend in authorized but unissued shares of any class if: (1) the surplus of the corporation is less...
- Texas Section 21.312 - Value Of Shares Issued As Share Dividends
(a) A share dividend payable in authorized but unissued shares with par value shall be issued at the par value of the respective share. (b)...
- Texas Section 21.313 - Transfer Of Surplus For Share Dividends
(a) When a share dividend payable in authorized but unissued shares with par value is made by a corporation, an amount of surplus designated by...
- Texas Section 21.314 - Determination Of Solvency, Net Assets, Stated Capital, And Surplus
(a) For purposes of this subchapter, the determination of whether a corporation is or would be insolvent and the determination of the value of a...
- Texas Section 21.315 - Date Of Determination Of Solvency, Net Assets, Stated Capital, And Surplus
(a) For purposes of this subchapter, a determination of whether a corporation is or would be insolvent after a distribution or share dividend or a...
- Texas Section 21.316 - Liability Of Directors For Wrongful Distributions
(a) Subject to Subsection (c), the directors of a corporation who vote for or assent to a distribution by the corporation that is prohibited by...
- Texas Section 21.317 - Statute Of Limitations On Action For Wrongful Distribution
An action may not be brought against a director of a corporation under Section 21.316 after the second anniversary of the date the alleged act...
SUBCHAPTER H SHAREHOLDERS' MEETINGS; NOTICE TO SHAREHOLDERS; VOTING AND QUORUM
- Texas Section 21.318 - Contribution From Certain Shareholders And Directors
(a) A director who is held liable for a claim asserted under Section 21.316 is entitled to receive contributions from shareholders who accepted or received...
- Texas Section 21.351 - Annual Meeting
(a) An annual meeting of the SHAREHOLDERS of a corporation shall be held at a time that is stated in or set in accordance with...
- Texas Section 21.352 - Special Meetings
(a) A special meeting of the shareholders of a corporation may be called by: (1) the president, the board of directors, or any other person...
- Texas Section 21.353 - Notice Of Meeting
(a) Except as provided by Section 21.456 and subject to Section 21.3531, written notice of a meeting in accordance with Section 6.051 shall be given...
- Texas Section 21.3531 - Notice By Electronic Transmission
(a) On consent of a shareholder, notice from a corporation under this code, the certificate of formation, or the bylaws may be provided to the...
- Texas Section 21.354 - Inspection Of Voting List
(a) The list of shareholders entitled to vote at the meeting prepared under Section 21.372 shall be: (1) subject to inspection by a shareholder during...
- Texas Section 21.355 - Closing Of Share Transfer Records
Share transfer records that are closed in accordance with Section 6.101 for the purpose of determining which shareholders are entitled to receive notice of a...
- Texas Section 21.356 - Record Date For Written Consent To Action
The record date provided in accordance with Section 6.102(a) may not be more than 10 days after the date on which the board of directors...
- Texas Section 21.357 - Record Date For Purpose Of Shareholders' Meeting
The record date for the purpose of determining shareholders entitled to notice of or to vote at a shareholders' meeting or any adjournment of the...
- Texas Section 21.358 - Quorum
(a) Subject to Subsection (b), the holders of the majority of the shares entitled to vote at a meeting of the shareholders of a corporation...
- Texas Section 21.359 - Voting In Election Of Directors
(a) Subject to Subsection (b), directors of a corporation shall be elected by a plurality of the votes cast by the holders of shares entitled...
- Texas Section 21.360 - No Cumulative Voting Right Unless Authorized
Except as provided by Section 21.361 or 21.362, a shareholder does not have the right to cumulate the shareholder's vote in the election of directors....
- Texas Section 21.361 - Cumulative Voting In Election Of Directors
(a) At each election of directors of the corporation, each shareholder entitled to vote at the election is entitled to: (1) vote the number of...
- Texas Section 21.362 - Cumulative Voting Right In Certain Corporations
Except as provided by the corporation's certificate of formation, a shareholder of a corporation incorporated before September 1, 2003, has the right to cumulatively vote...
- Texas Section 21.363 - Voting On Matters Other Than Election Of Directors
(a) Subject to Subsection (b), with respect to a matter other than the election of directors or a matter for which the affirmative vote of...
- Texas Section 21.364 - Vote Required To Approve Fundamental Action
(a) In this section, a "fundamental action" means: (1) an amendment of a certificate of formation, including an amendment required for cancellation of an event...
- Texas Section 21.365 - Changes In Vote Required For Certain Matters
(a) With respect to a matter for which the affirmative vote of the holders of a specified portion of the shares entitled to vote is...
- Texas Section 21.366 - Number Of Votes Per Share
(a) Except as provided by the certificate of formation of a corporation or this code, each outstanding share, regardless of class, shall be entitled to...
- Texas Section 21.367 - Voting In Person Or By Proxy
(a) A shareholder may vote in person or by proxy executed in writing by the shareholder. (b) A telegram, telex, cablegram, or other form of...
- Texas Section 21.368 - Term Of Proxy
A proxy is not valid after 11 months after the date the proxy is executed unless otherwise provided by the proxy. Acts 2003, 78th Leg.,...
- Texas Section 21.369 - Revocability Of Proxy
(a) In this section, a "proxy coupled with an interest" includes the appointment as proxy of: (1) a pledgee; (2) a person who purchased or...
- Texas Section 21.370 - Enforceability Of Proxy
(a) An irrevocable proxy is specifically enforceable against the holder of shares or any successor or transferee of the holder if: (1) the proxy is...
- Texas Section 21.371 - Procedures In Bylaws Relating To Proxies
(a) A corporation may establish in the corporation's bylaws procedures consistent with this code for determining the validity of proxies and determining whether shares that...
SUBCHAPTER I BOARD OF DIRECTORS
- Texas Section 21.372 - Shareholder Meeting List
(a) Not later than the 11th day before the date of each meeting of the shareholders of a corporation, an officer or agent of the...
- Texas Section 21.401 - Management By Board Of Directors
(a) Except as provided by Section 21.101 or Subchapter O, the board of directors of a corporation shall: (1) exercise or authorize the exercise of...
- Texas Section 21.402 - Board Member Eligibility Requirements
Unless the certificate of formation or bylaws of a corporation provide otherwise, a person is not required to be a resident of this state or...
- Texas Section 21.403 - Number Of Directors
(a) The board of directors of a corporation may consist of one or more directors. (b) If the corporation is to be managed by a...
- Texas Section 21.404 - Designation Of Initial Board Of Directors
If the corporation is to be managed by a board of directors, the certificate of formation of a corporation must state the names and addresses...
- Texas Section 21.405 - Election Of Board Of Directors
(a) At the first annual meeting of shareholders of a corporation and at each subsequent annual meeting of shareholders, the holders of shares entitled to...
- Texas Section 21.406 - Special Voting Rights Of Directors
(a) The certificate of formation of a corporation may provide that directors, regardless of whether elected by the holders of a class or series of...
- Texas Section 21.407 - Term Of Office
Except as otherwise provided by this subchapter, the term of office of a director extends from the date the director is elected and qualified or...
- Texas Section 21.408 - Special Terms Of Office
(a) The certificate of formation or bylaws of a corporation may provide that all or some of the board of directors may be divided into...
- Texas Section 21.409 - Removal Of Directors
(a) Except as otherwise provided by the certificate of formation or bylaws of a corporation or this subchapter, the shareholders of the corporation may remove...
- Texas Section 21.4091 - Resignation Of Directors
(a) Except as otherwise provided by the certificate of formation or bylaws, a director of a corporation may resign at any time by providing written...
- Texas Section 21.410 - Vacancy
(a) A vacancy occurring in the initial board of directors before the issuance of shares may be filled by the affirmative vote or written consent...
- Texas Section 21.411 - Notice Of Meeting
(a) Regular meetings of the board of directors of a corporation may be held with or without notice as prescribed by the corporation's bylaws. (b)...
- Texas Section 21.412 - Waiver Of Notice
(a) If the bylaws of a corporation require notice of a meeting to be given to a director, a written waiver of the notice signed...
- Texas Section 21.413 - Quorum
(a) A quorum of the board of directors is the majority of the number of directors set or established in the manner provided by the...
- Texas Section 21.414 - Dissent To Action
(a) A director of a corporation who is present at a meeting of the board of directors at which action has been taken is presumed...
- Texas Section 21.415 - Action By Directors
(a) The act of a majority of the directors present at a meeting at which a quorum is present at the time of the act...
- Texas Section 21.416 - Committees Of Board Of Directors
(a) If authorized by the certificate of formation or bylaws of a corporation, the board of directors of the corporation may designate: (1) committees composed...
- Texas Section 21.417 - Election Of Officers
The board of directors of a corporation shall elect a president and a secretary at the time and in the manner prescribed by the corporation's...
SUBCHAPTER J FUNDAMENTAL BUSINESS TRANSACTIONS
- Texas Section 21.418 - Contracts Or Transactions Involving Interested Directors And Officers
(a) This section applies to a contract or transaction between a corporation and: (1) one or more directors or officers, or one or more affiliates...
- Texas Section 21.451 - Definitions
In this subchapter: (1) "Participating shares" means shares that entitle the holders of the shares to participate without limitation in distributions. (2) "Sale of all...
- Texas Section 21.452 - Approval Of Merger
(a) A corporation that is a party to the merger under Chapter 10 must approve the merger by complying with this section. (b) The board...
- Texas Section 21.453 - Approval Of Conversion
(a) A corporation must approve a conversion under Chapter 10 by complying with this section. (b) The board of directors of the corporation shall adopt...
- Texas Section 21.454 - Approval Of Exchange
(a) A corporation the shares of which are to be acquired in an exchange under Chapter 10 must approve the exchange by complying with this...
- Texas Section 21.455 - Approval Of Sale Of All Or Substantially All Of Assets
(a) Except as provided by the certificate of formation of a domestic corporation, a sale, lease, pledge, mortgage, assignment, transfer, or other conveyance of an...
- Texas Section 21.456 - General Procedure For Submission To Shareholders Of Fundamental Business Transaction
(a) If a fundamental business transaction involving a corporation is required to be submitted to the shareholders of the corporation under this subchapter, the corporation...
- Texas Section 21.457 - General Vote Requirement For Approval Of Fundamental Business Transaction
(a) Except as provided by this code or the certificate of formation of a corporation in accordance with Section 21.365, the affirmative vote of the...
- Texas Section 21.458 - Class Voting Requirements For Certain Fundamental Business Transactions
(a) Separate voting by a class or series of shares of a corporation is required for approval of a plan of merger or conversion if:...
- Texas Section 21.459 - No Shareholder Vote Requirement For Certain Fundamental Business Transactions
(a) Unless required by the corporation's certificate of formation, a plan of merger is not required to be approved by the shareholders of a corporation...
- Texas Section 21.460 - Rights Of Dissent And Appraisal
A shareholder of a domestic corporation has the rights of dissent and appraisal under Subchapter H, Chapter 10, with respect to a fundamental business transaction....
- Texas Section 21.461 - Pledge, Mortgage, Deed Of Trust, Or Trust Indenture
Except as provided by the corporation's certificate of formation: (1) the board of directors of a corporation may authorize a pledge, mortgage, deed of trust,...
SUBCHAPTER K WINDING UP AND TERMINATION
- Texas Section 21.462 - Conveyance By Corporation
A corporation may convey real property of the corporation when authorized by appropriate resolution of the board of directors. Acts 2003, 78th Leg., ch. 182,...
- Texas Section 21.501 - Approval Of Voluntary Winding Up, Reinstatement, Or Revocation Of Voluntary Winding Up
A corporation must approve a voluntary winding up in accordance with Chapter 11, a reinstatement in accordance with Section 11.202, a cancellation of an event...
- Texas Section 21.502 - Certain Procedures Relating To Winding Up
To approve a voluntary winding up, a reinstatement, a cancellation of an event requiring winding up, or a revocation of a voluntary decision to wind...
- Texas Section 21.503 - Meeting Of Shareholders; Notice
(a) Each shareholder of record entitled to vote at a meeting described by Section 21.502(3)(A)(ii) must be given written notice stating that the purpose or...
SUBCHAPTER L DERIVATIVE PROCEEDINGS
- Texas Section 21.504 - Responsibility For Winding Up
If a corporation determines or is required to wind up, the directors of the corporation shall manage the process of winding up the business or...
- Texas Section 21.551 - Definitions
In this subchapter: (1) "Derivative proceeding" means a civil suit in the right of a domestic corporation or, to the extent provided by Section 21.562,...
- Texas Section 21.552 - Standing To Bring Proceeding
A shareholder may not institute or maintain a derivative proceeding unless: (1) the shareholder: (A) was a shareholder of the corporation at the time of...
- Texas Section 21.553 - Demand
(a) A shareholder may not institute a derivative proceeding until the 91st day after the date a written demand is filed with the corporation stating...
- Texas Section 21.554 - Determination By Directors Or Independent Persons
(a) A determination of how to proceed on allegations made in a demand or petition relating to a derivative proceeding must be made by an...
- Texas Section 21.555 - Stay Of Proceeding
(a) If the domestic or foreign corporation that is the subject of a derivative proceeding commences an inquiry into the allegations made in a demand...
- Texas Section 21.556 - Discovery
(a) If a domestic or foreign corporation proposes to dismiss a derivative proceeding under Section 21.558, discovery by a shareholder after the filing of the...
- Texas Section 21.557 - Tolling Of Statute Of Limitations
A written demand filed with the corporation under Section 21.553 tolls the statute of limitations on the claim on which demand is made until the...
- Texas Section 21.558 - Dismissal Of Derivative Proceeding
(a) A court shall dismiss a derivative proceeding on a motion by the corporation if the person or group of persons described by Section 21.554...
- Texas Section 21.559 - Proceeding Instituted After Demand Rejected
If a derivative proceeding is instituted after a demand is rejected, the petition must allege with particularity facts that establish that the rejection was not...
- Texas Section 21.560 - Discontinuance Or Settlement
(a) A derivative proceeding may not be discontinued or settled without court approval. (b) The court shall direct that notice be given to the affected...
- Texas Section 21.561 - Payment Of Expenses
(a) In this section, "expenses" means reasonable expenses incurred by a party in a derivative proceeding, including: (1) attorney's fees; (2) costs in pursuing an...
- Texas Section 21.562 - Application To Foreign Corporations
(a) In a derivative proceeding brought in the right of a foreign corporation, the matters covered by this subchapter are governed by the laws of...
SUBCHAPTER M AFFILIATED BUSINESS COMBINATIONS
- Texas Section 21.563 - Closely Held Corporation
(a) In this section, "closely held corporation" means a corporation that has: (1) fewer than 35 shareholders; and (2) no shares listed on a national...
- Texas Section 21.601 - Definitions
In this subchapter: (1) "Issuing public corporation" means a domestic corporation that has: (A) 100 or more shareholders of record as shown by the share...
- Texas Section 21.602 - Affiliated Shareholder
(a) For purposes of this subchapter, a person, other than the issuing public corporation or a wholly owned subsidiary of the issuing public corporation, is...
- Texas Section 21.603 - Beneficial Owner Of Shares Or Other Securities
(a) For purposes of this subchapter, a person is a beneficial owner of shares or other securities if the person individually, or through an affiliate...
- Texas Section 21.604 - Business Combination
A business combination is: (1) a merger, share exchange, or conversion of an issuing public corporation or a subsidiary with: (A) an affiliated shareholder; (B)...
- Texas Section 21.605 - Control
(a) For purposes of this subchapter, a person has control of another person if the person has possession, directly or indirectly, of the power to...
- Texas Section 21.606 - Three-year Moratorium On Certain Business Combinations
An issuing public corporation may not, directly or indirectly, enter into or engage in a business combination with an affiliated shareholder, or any affiliate or...
- Texas Section 21.607 - Application Of Moratorium
Section 21.606 does not apply to: (1) a business combination of an issuing public corporation if: (A) the original articles of incorporation or original bylaws...
- Texas Section 21.608 - Effect On Other Actions
(a) This subchapter does not affect, directly or indirectly, the validity of another action by the board of directors of an issuing public corporation. (b)...
- Texas Section 21.609 - Conflicting Provisions
If this subchapter conflicts with another provision of this code, this subchapter controls. Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
SUBCHAPTER N PROVISIONS RELATING TO INVESTMENT COMPANIES
- Texas Section 21.610 - Change In Voting Requirements
The affirmative vote or concurrence of shareholders required for approval of an action that is required to be submitted to a vote of the shareholders...
- Texas Section 21.651 - Definition
In this subchapter, "investment company" means a corporation registered as an open-end company under the Investment Company Act. Acts 2003, 78th Leg., ch. 182, Sec....
- Texas Section 21.652 - Establishing Class Or Series Of Shares; Change In Number Of Shares
(a) In addition to the actions the board may undertake under Subchapters D, E, and F, the board of directors of an investment company may:...
- Texas Section 21.653 - Required Statement Relating To Shares
(a) Before the first issuance of shares of a class or series established or increased or decreased by resolution adopted by the board of directors...
- Texas Section 21.654 - Term Of Office Of Directors
Unless the director resigns or is removed in accordance with the certificate of formation or bylaws of the investment company, a director of an investment...
SUBCHAPTER O CLOSE CORPORATION
- Texas Section 21.655 - Meetings Of Shareholders
(a) If provided by the certificate of formation or bylaws of an investment company, the investment company is not required to hold an annual meeting...
- Texas Section 21.701 - Definitions
In this subchapter: (1) "Close corporation" means a domestic corporation formed under this subchapter or governed by this subchapter because of Section 21.705, 21.706, or...
- Texas Section 21.702 - Applicability Of Subchapter
(a) This subchapter applies only to a close corporation. (b) This chapter applies to a close corporation to the extent not inconsistent with this subchapter....
- Texas Section 21.703 - Formation Of Close Corporation
A close corporation shall be formed in accordance with Chapter 3. Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
- Texas Section 21.704 - Bylaws Of Close Corporation
(a) A close corporation does not need to adopt bylaws if provisions required by law to be contained in the bylaws are contained in the...
- Texas Section 21.705 - Adoption Of Amendment For Close Corporation Status
(a) An ordinary corporation may become a close corporation by amending its certificate of formation in accordance with Chapter 3 to conform with Section 3.008....
- Texas Section 21.706 - Adoption Of Close Corporation Status Through Merger, Exchange, Or Conversion
(a) A surviving or new corporation resulting from a merger or conversion or a corporation that acquires a corporation under an exchange under Chapter 10...
- Texas Section 21.707 - Existing Close Corporation
(a) This section applies to an existing corporation that elected to become a close corporation before the mandatory application date of this code and has...
- Texas Section 21.708 - Termination Of Close Corporation Status
A close corporation may terminate its status as a close corporation by: (1) filing a statement terminating close corporation status under Section 21.709; (2) amending...
- Texas Section 21.709 - Statement Terminating Close Corporation Status; Filing; Notice
(a) If a close corporation provision specifies a time or event requiring the termination of close corporation status, regardless of whether the provision is identifiable...
- Texas Section 21.710 - Effect Of Termination Of Close Corporation Status
(a) A close corporation that terminates its status as a close corporation and becomes an ordinary corporation is subject to this chapter as if the...
- Texas Section 21.711 - Shareholders' Meeting To Elect Directors
A shareholders' meeting required by Section 21.710(c)(2) shall be promptly called after the termination of close corporation status takes effect. If a meeting is not...
- Texas Section 21.712 - Term Of Office Of Directors
A director succeeding to the management of the corporation under Section 21.710(c) shall have a term of office as set forth in Section 21.408. Until...
- Texas Section 21.713 - Management
A close corporation shall be managed: (1) by a board of directors in the same manner an ordinary corporation would be managed under this chapter;...
- Texas Section 21.714 - Shareholders' Agreement
(a) The shareholders of a close corporation may enter into one or more shareholders' agreements. (b) The business and affairs of a close corporation or...
- Texas Section 21.715 - Execution Of Shareholders' Agreement
A shareholders' agreement shall be executed: (1) in the case of an existing close corporation, by each shareholder at the time of execution, regardless of...
- Texas Section 21.716 - Adoption Of Amendment Of Shareholders' Agreement
Unless otherwise provided by a shareholders' agreement, an amendment to the shareholders' agreement of a close corporation may be adopted only by the written consent...
- Texas Section 21.717 - Delivery Of Shareholders' Agreement
(a) The close corporation shall deliver a complete copy of a shareholders' agreement to: (1) each person who is bound by the shareholders' agreement; (2)...
- Texas Section 21.718 - Statement Of Operation As Close Corporation
(a) On or after the formation of a close corporation or adoption of close corporation status, a close corporation that begins to conduct its business...
- Texas Section 21.719 - Validity And Enforceability Of Shareholders' Agreement
(a) A shareholders' agreement executed in accordance with Section 21.715 is valid and enforceable notwithstanding: (1) the elimination of a board of directors; (2) any...
- Texas Section 21.720 - Persons Bound By Shareholders' Agreement
(a) A shareholders' agreement executed in accordance with Section 21.715 is: (1) considered to be an agreement among all of the shareholders of the close...
- Texas Section 21.721 - Delivery Of Copy Of Shareholders' Agreement To Transferee
(a) Before the transfer of shares of a close corporation in which there is a shareholders' agreement, the transferor shall deliver a complete copy of...
- Texas Section 21.722 - Effect Of Required Statement On Share Certificate And Delivery Of Shareholders' Agreement
If a certificate representing shares of a close corporation contains the statement required by Section 21.732, and a complete copy of each shareholders' agreement has...
- Texas Section 21.723 - Party Not Bound By Shareholders' Agreement On Cessation; Liability
(a) Notwithstanding the person's signature, a person ceases to be a party to, and bound by, a shareholders' agreement when the person ceases to be...
- Texas Section 21.724 - Termination Of Shareholders' Agreement
(a) Except as provided by Subsection (b), a shareholders' agreement terminates when the close corporation terminates its status as a close corporation. (b) If provided...
- Texas Section 21.725 - Consequences Of Management By Persons Other Than Board Of Directors
Sections 21.726-21.729 apply only to a close corporation the business and affairs of which are managed wholly or partly by the shareholders of the close...
- Texas Section 21.726 - Shareholders Considered Directors
(a) When required by the context of this chapter, the shareholders of a close corporation described by Section 21.725 are considered to be directors of...
- Texas Section 21.727 - Liability Of Shareholders
The shareholders of a close corporation described by Section 21.725 are subject to any liability imposed on a director of a corporation by this chapter...
- Texas Section 21.728 - Mode And Effect Of Taking Action By Shareholders And Others
(a) An action that shall or may be taken by the board of directors of an ordinary corporation as required or authorized by this chapter...
- Texas Section 21.729 - Limitation Of Shareholder's Liability
(a) A shareholder of a close corporation described by Section 21.725 is not liable because of a shareholders' vote or shareholder action without a vote...
- Texas Section 21.730 - Lack Of Formalities; Treatment As Partnership
The failure of a close corporation under this subchapter to observe a usual formality or requirement prescribed for an ordinary corporation by this chapter relating...
- Texas Section 21.731 - Other Agreements Among Shareholders Permitted
Sections 21.713-21.730 do not prohibit or impair any other agreement between two or more shareholders of an ordinary corporation permitted by this chapter or other...
SUBCHAPTER P JUDICIAL PROCEEDINGS RELATING TO CLOSE CORPORATION
- Texas Section 21.732 - Close Corporation Share Certificates
(a) In addition to a matter required or authorized by law to be stated on a certificate representing shares, each certificate representing shares issued by...
- Texas Section 21.751 - Definitions
In this subchapter: (1) "Court" means a district court in the county in which the principal office of the close corporation is located. (2) "Custodian"...
- Texas Section 21.752 - Proceedings Authorized
In addition to any other judicial proceeding pertaining to an ordinary corporation provided for by this chapter or other law, a close corporation or shareholder...
- Texas Section 21.753 - Notice; Intervention
(a) Notice of the institution of a proceeding shall be given to the close corporation, if the corporation is not a plaintiff, and to each...
- Texas Section 21.754 - Proceeding Nonexclusive
Except as provided by Section 21.755, the right of a close corporation or a shareholder to institute a proceeding under Section 21.752 is in addition...
- Texas Section 21.755 - Unavailability Of Judicial Proceeding
(a) A shareholder may not institute a proceeding before exhausting any nonjudicial remedy contained in a close corporation provision for resolution of an issue that...
- Texas Section 21.756 - Judicial Proceeding To Enforce Close Corporation Provision
(a) In a judicial proceeding under this section, a court shall enforce a close corporation provision without regard to whether there is an adequate remedy...
- Texas Section 21.757 - Liquidation; Involuntary Winding Up And Termination; Receivership
Except as provided by Section 21.756, in a case in which a shareholder is entitled to wind up and terminate a close corporation under a...
- Texas Section 21.758 - Appointment Of Provisional Director
(a) In a judicial proceeding under this section, a court shall appoint a provisional director for a close corporation on presentation of proof that the...
- Texas Section 21.759 - Rights And Powers Of Provisional Director
A provisional director has all the rights and powers of an elected director of the close corporation, or the rights of vote or consent of...
- Texas Section 21.760 - Compensation Of Provisional Director
(a) The compensation of a provisional director shall be determined by an agreement between the provisional director and the close corporation, subject to court approval....
- Texas Section 21.761 - Appointment Of Custodian
(a) In a judicial proceeding under this section, a court shall appoint a custodian for a close corporation on presentation of proof that: (1) at...
- Texas Section 21.762 - Powers And Duties Of Custodian
A person who qualifies as a custodian has all of the powers and duties and the title of a receiver appointed under Sections 11.404-11.406. The...
SUBCHAPTER Q MISCELLANEOUS PROVISIONS
- Texas Section 21.763 - Termination Of Custodianship
If the condition requiring the appointment of a custodian is remedied other than by liquidation or winding up and termination, the court shall terminate the...
- Texas Section 21.801 - Shares And Other Securities Are Personal Property
Except as otherwise provided by this code, the shares and other securities of a corporation are personal property. Acts 2003, 78th Leg., ch. 182, Sec....
SUBCHAPTER R RATIFICATION OF DEFECTIVE CORPORATE ACTS OR SHARES; PROCEEDINGS
- Texas Section 21.802 - Penalties For Late Filing Of Certain Instruments
(a) A person required under Title 1 or this title to file a change of registered office or agent, a certificate of voluntary withdrawal, or...
- Texas Section 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...
- Texas Section 21.902 - Ratification Of Defective Corporate Act And Putative Shares
Subject to Section 21.909 or 21.910, a defective corporate act or putative shares are not void or voidable solely as a result of a failure...
- Texas Section 21.903 - Ratification Of Defective Corporate Act; Adoption Of Resolution
(a) To ratify a defective corporate act, the board of directors of the corporation shall adopt a resolution stating: (1) the defective corporate act to...
- Texas Section 21.904 - Quorum And Voting Requirements For Adoption Of Resolution
(a) The quorum and voting requirements applicable to the adoption of a resolution under Section 21.903 are the same as the quorum and voting requirements...
- Texas Section 21.905 - Shareholder Adoption Of Resolution Required
The resolution adopted under Section 21.903 must be submitted to shareholders for adoption as provided by Sections 21.906 and 21.907, unless: (1) no other provision...
- Texas Section 21.906 - Notice Requirements For Resolution Submitted For Shareholder Approval
(a) If Section 21.905 requires that the resolution be submitted to the shareholders for approval, notice of the time, place, if any, and purpose of...
- Texas Section 21.907 - Shareholder Meeting; Quorum And Voting
(a) At the shareholder meeting, the quorum and voting requirements applicable to the adoption of the resolution under Section 21.905 shall be the same as...
- Texas Section 21.908 - Certificate Of Validation
(a) If the defective corporate act ratified under this subchapter would have required under any other provision of the corporate statute the filing of a...
- Texas Section 21.909 - Adoption Of Resolution; Effect On Defective Corporate Act
On or after the validation effective time, unless determined otherwise in an action brought under Section 21.914, each defective corporate act set forth in the...
- Texas Section 21.910 - Adoption Of Resolution; Effect On Putative Shares
On or after the validation effective time, unless determined otherwise in an action brought under Section 21.914, each putative share or fraction of a putative...
- Texas Section 21.911 - Notice To Shareholders Following Adoption Of Resolution
(a) Notice of the adoption of a resolution under this subchapter shall be given promptly to: (1) each holder of valid shares and putative shares,...
- Texas Section 21.912 - Valid Shares Or Putative Shares
In the absence of actual fraud in the transaction, the judgment of the board of directors of a corporation that shares of the corporation are...
- Texas Section 21.913 - Ratification Procedures Or Court Proceedings Concerning Validation Not Exclusive
(a) Ratification of an act or transaction under this subchapter or validation of an act or transaction as provided by Sections 21.914 through 21.917 is...
- Texas Section 21.914 - Proceeding Regarding Validity Of Defective Corporate Acts And Shares
(a) The following may bring an action under this section: (1) the corporation; (2) any successor entity to the corporation; (3) any member of the...
- Texas Section 21.915 - Exclusive Jurisdiction
The district court has exclusive jurisdiction to hear and determine any action brought under Section 21.914. Added by Acts 2015, 84th Leg., R.S., Ch. 32...
- Texas Section 21.916 - Service
(a) Service of an application filed under Section 21.914 on the registered agent of a corporation or in any other manner permitted by applicable law...
- Texas Section 21.917 - Statute Of Limitations
(a) This section does not apply to: (1) an action asserting that a ratification was not accomplished in accordance with this subchapter; or (2) any...