Source: https://chowinslaw.com/resources/texas-business-laws/276-purpose-and-power-of-texas-business-organizations
Timestamp: 2019-04-23 04:27:48+00:00

Document:
§ 2.001. GENERAL SCOPE OF PERMISSIBLE PURPOSES.
A domestic entity has any lawful purpose or purposes, unless otherwise provided by this code.
§ 2.002. PURPOSES OF NONPROFIT ENTITY.
§ 2.003. GENERAL PROHIBITED PURPOSES.
§ 2.004. LIMITATION ON PURPOSES OF PROFESSIONAL ENTITY.
§ 2.005. LIMITATION IN GOVERNING DOCUMENTS.
The governing documents of a domestic entity may contain limitations on the entity's purposes.
§ 2.007. ADDITIONAL PROHIBITED ACTIVITIES OF FOR-PROFIT CORPORATION.
§ 2.009. PERMISSIBLE PURPOSE OF NONPROFIT CORPORATION RELATED TO ORGANIZED LABOR.
Subject to Chapter 101, Labor Code, a nonprofit corporation may be formed to organize laborers, workers, or wage earners to protect themselves in their various pursuits.
§ 2.010. PROHIBITED ACTIVITIES OF NONPROFIT CORPORATION.
§ 2.011. PURPOSES OF COOPERATIVE ASSOCIATION.
(a) A person may organize a cooperative association under this code to acquire, produce, build, operate, manufacture, furnish, exchange, or distribute any type of property, commodities, goods, or services for the primary and mutual benefit of the members of the cooperative association.
§ 2.012. LIMITATION ON PURPOSES OF REAL ESTATE INVESTMENT TRUST.
The purposes of a real estate investment trust are limited by § 3.012.
§ 2.102. ADDITIONAL POWERS OF NONPROFIT ENTITY OR INSTITUTION.
To effect its purposes, a domestic nonprofit entity or institution formed for a religious, charitable, educational, or eleemosynary purpose may acquire, own, hold, mortgage, and dispose of and invest its funds in property for the use and benefit of, under the discretion of, and in trust for a convention, conference, or association organized under the laws of this state or another state with which it is affiliated or by which it is controlled.
§ 2.103. POWER TO INCUR INDEBTEDNESS.
(d) This § does not apply to indebtedness created by a domestic entity that is incurred by reason of the authorization or payment of a distribution.
§ 2.104. POWER TO MAKE GUARANTIES.
(a) In this §, "guaranty" means a guaranty, mortgage, pledge, security agreement, or other agreement making the domestic entity or its assets liable for another person's contract, security, or other obligation.
§ 2.105. ADDITIONAL POWERS OF CERTAIN PIPELINE BUSINESSES.
In addition to the powers provided by the other §§ of this subchapter, a corporation, general partnership, limited partnership, limited liability company, or other combination of those entities engaged as a common carrier in the pipeline business for the purpose of transporting oil, oil products, gas, carbon dioxide, salt brine, fuller's earth, sand, clay, liquefied minerals, or other mineral solutions has all the rights and powers conferred on a common carrier by §§ 111.019-111.022, Natural Resources Code.
§ 2.106. POWER OF NONPROFIT CORPORATION TO SERVE AS TRUSTEE.
(2) benefiting another organization described by one of those §§ of the Internal Revenue Code, or a corresponding provision of a subsequent federal tax law, or listed by the Internal Revenue Service in the Cumulative List of Organizations Described in § 170(c) of the Internal Revenue Code of 1986, I.R.S. Publication 78, or any successor I.R.S. publication.
(b) Any corporation (or person or entity assisting such corporation) described in this § shall have immunity from suit (including both a defense to liability and the right not to bear the cost, burden, and risk of discovery and trial) as to any claim alleging that the corporation's role as trustee of a trust described in this § constitutes engaging in the trust business in a manner requiring a state charter as defined in § 181.002(a)(9), Finance Code. An interlocutory appeal may be taken if a court denies or otherwise fails to grant a motion for summary judgment that is based on an assertion of the immunity provided in this sub§.
§ 2.107. STANDARD TAX PROVISIONS FOR CERTAIN CHARITABLE NONPROFIT CORPORATIONS; POWER TO EXCLUDE.
(a) Notwithstanding any conflicting provision of this chapter, Chapter 3, or the certificate of formation and except as provided by Sub§ (b), the certificate of formation of each corporation that is a private foundation as defined by § 509, Internal Revenue Code, is considered to contain the following provisions: "The corporation shall make distributions at the time and in the manner as not to subject it to tax under § 4942 of the Internal Revenue Code of 1986; the corporation shall not engage in any act of self-dealing which would be subject to tax under § 4941 of the Code; the corporation shall not retain any excess business holdings which would subject it to tax under § 4943 of the Code; the corporation shall not make any investments which would subject it to tax under § 4944 of the Code; and the corporation shall not make any taxable expenditures which would subject it to tax under § 4945 of the Code."
(b) A nonprofit corporation described by Sub§ (a) may amend the certificate of formation of the corporation to expressly exclude the application of Sub§ (a).
§ 2.108. POWERS OF PROFESSIONAL ASSOCIATION.
Except as provided by Title 7, a professional association has the same powers, privileges, duties, restrictions, and liabilities as a for-profit corporation.
§ 2.109. POWERS OF PROFESSIONAL CORPORATION.
Except as provided by Title 7, a professional corporation has the same powers, privileges, duties, restrictions, and liabilities as a for-profit corporation.
§ 2.110. POWERS OF COOPERATIVE ASSOCIATION.
(a) Except as provided by Chapter 251, a cooperative association may exercise the same powers and privileges and is subject to the same duties, restrictions, and liabilities as a nonprofit corporation.
§ 2.111. LIMITATION ON POWERS OF COOPERATIVE ASSOCIATION.
Except for the payment of necessary legal fees or promotion expenses, a cooperative association may not directly or indirectly use its funds, issue shares, or incur indebtedness for the payment of compensation for the organization of the cooperative association in excess of five percent of the amount paid for the shares or membership certificates involved in the promotion transaction.
§ 2.112. STATED POWERS IN SUBCHAPTER SUFFICIENT.
A domestic entity is not required to state any of the powers provided to the entity by this subchapter in its governing documents.
§ 2.113. LIMITATION ON POWERS.
(a) This subchapter does not authorize a domestic entity or a managerial official of a domestic entity to exercise a power in a manner inconsistent with a limitation on the purposes or powers of the entity contained in its governing documents, this code, or other law of this state.
§ 2.114. CERTIFICATED INDEBTEDNESS; MANNER OF ISSUANCE; SIGNATURE AND SEAL.
(a) Except as otherwise provided by the governing documents of the domestic entity, this code, or other law, on the issuance by a domestic entity of a bond, debenture, or other evidence of indebtedness in certificated form, the seal of the entity, if the entity has adopted a seal, may be a facsimile that may be engraved or printed on the certificate.
(b) Except as otherwise provided by the governing documents of the domestic entity, this code, or other law, if a security described by Sub§ (a) is authenticated with the manual signature of an authorized officer of the domestic entity or an authorized officer or representative, to the extent permitted by law, of a transfer agent or trustee appointed or named by an indenture of trust or other agreement under which the security is issued, the signature of any officer of the domestic entity may be a facsimile signature.
(c) A security described by Sub§ (a) that contains the manual or facsimile signature of a person who is no longer an officer when the security is delivered by the entity may be adopted, issued, and delivered by the entity in the same manner and to the same extent as if the person had remained an officer of the entity.

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