reglab/statecodes huggingface dataset:
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter E. Shareholder Rights and Restrictions › Section 21.223. Limitation of Liability for Obligations

Sec. 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 affiliate of such a holder, owner, or subscriber or of the corporation, may not be held liable to the corporation or its obligees with respect to:
(1)  the shares, other than the obligation to pay to the corporation the full amount of consideration, fixed in compliance with Sections 21.157-21.162, for which the shares were or are to be issued;
(2)  any contractual obligation of the corporation or any matter relating to or arising from the obligation on the basis that the holder, beneficial owner, subscriber, or affiliate is or was the alter ego of the corporation or on the basis of actual or constructive fraud, a sham to perpetrate a fraud, or other similar theory; or
(3)  any obligation of the corporation on the basis of the failure of the corporation to observe any corporate formality, including the failure to:
(A)  comply with this code or the certificate of formation or bylaws of the corporation; or
(B)  observe any requirement prescribed by this code or the certificate of formation or bylaws of the corporation for acts to be taken by the corporation or its directors or shareholders.
(b)  Subsection (a)(2) does not prevent or limit the liability of a holder, beneficial owner, subscriber, or affiliate if the obligee demonstrates that the holder, beneficial owner, subscriber, or affiliate caused the corporation to be used for the purpose of perpetrating and did perpetrate an actual fraud on the obligee primarily for the direct personal benefit of the holder, beneficial owner, subscriber, or affiliate.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 688 (H.B. 1737), Sec. 74, eff. September 1, 2007.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter E. Shareholder Rights and Restrictions › Section 21.224. Preemption of Liability

Sec. 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 of the corporation, for an obligation that is limited by Section 21.223 is exclusive and preempts any other liability imposed for that obligation under common law or otherwise.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2009, 81st Leg., R.S., Ch. 84 (S.B. 1442), Sec. 34, eff. September 1, 2009.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter E. Shareholder Rights and Restrictions › Section 21.225. Exceptions to Limitations

Sec. 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 person:
(1)  expressly assumes, guarantees, or agrees to be personally liable to the obligee for the obligation;  or
(2)  is otherwise liable to the obligee for the obligation under this code or other applicable statute.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter E. Shareholder Rights and Restrictions › Section 21.226. Pledgees and Trust Administrators

Sec. 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, assignee for the benefit of creditors, or receiver is not personally liable as a holder of or subscriber to shares of a corporation.
(c)  The estate and funds administered by an executor, administrator, conservator, guardian, trustee, assignee for the benefit of creditors, or receiver are liable for the full amount of the consideration for which the shares were or are to be issued.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter F. Reductions in Stated Capital; Cancellation of Treasury Shares › Section 21.251. Reduction of Stated Capital by Redemption or Purchase of Redeemable Shares

Sec. 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 the shares;  and
(2)  restoring the shares to the status of authorized but unissued shares, unless the corporation's certificate of formation provides that shares may not be reissued after the shares are redeemed or purchased by the corporation.
(b)  If the corporation is prohibited from reissuing the shares by the certificate of formation following a redemption or purchase under Subsection (a), the number of shares of the class that the corporation is authorized to issue is reduced by the number of shares canceled.
(c)  If shares redeemed or purchased by a corporation under Subsection (a) constitute all of the outstanding shares of a particular class of shares and the certificate of formation provides that the shares of the class, when redeemed and repurchased, may not be reissued, the corporation may not issue any additional shares of the class of shares.
(d)  Upon the redemption or purchase of redeemable shares under this section, the stated capital of the corporation shall be reduced by that part of the stated capital that was, at the time of the redemption or purchase, represented by those redeemable shares.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter F. Reductions in Stated Capital; Cancellation of Treasury Shares › Section 21.252. Cancellation of Treasury Shares

Sec. 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 time.
(b)  Upon the cancellation of treasury shares, the stated capital of the corporation shall be reduced by that part of the stated capital that was, at the time of the cancellation, represented by the canceled shares, and the canceled shares shall be restored to the status of authorized but unissued shares.
(c)  This section does not prohibit a cancellation of shares or a reduction of stated capital in any other manner permitted by law.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter F. Reductions in Stated Capital; Cancellation of Treasury Shares › Section 21.253. Procedures for Reduction of Stated Capital by Board of Directors

Sec. 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 may be reduced in the manner provided by this section.
(b)  The board of directors shall adopt a resolution that:
(1)  states the amount of the proposed reduction of the stated capital and the manner in which the reduction will be effected;  and
(2)  directs that the proposed reduction be submitted to a vote of the shareholders at an annual or special meeting.
(c)  Each shareholder of record entitled to vote on the reduction of stated capital shall be given written notice stating that the purpose or one of the purposes of the meeting is to consider the matter of reducing the stated capital of the corporation in the amount and manner proposed by the board of directors.  The notice shall be given in the time and manner provided by this code for giving notice of shareholders' meetings.
(d)  The affirmative vote of the holders of at least the majority of the shares entitled to vote on the matter is required for approval of the resolution proposing the reduction of stated capital.
(e)  Upon the approval of the resolution by the shareholders, the stated capital of the corporation shall be reduced as provided in the resolution.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter F. Reductions in Stated Capital; Cancellation of Treasury Shares › Section 21.254. Restriction on Reduction of Stated Capital

Sec. 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 be reduced to an amount equal to or less than the sum of the:
(1)  aggregate preferential amounts payable on all issued shares with a preferential right to the assets of the corporation in the event of voluntary winding up and termination;  and
(2)  aggregate par value of all issued shares with par value but no preferential right to the assets of the corporation in the event of voluntary winding up and termination.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter G. Distributions and Share Dividends › Section 21.301. Definitions

Sec. 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)  the net assets of the corporation if the distribution:
(i)  is a purchase or redemption of its own shares by a corporation that:
(a)  is eliminating fractional shares;
(b)  is collecting or compromising indebtedness owed by or to the corporation; or
(c)  is paying dissenting shareholders entitled to payment for their shares under this code; or
(ii)  is made by a consuming assets corporation and is not the purchase or redemption of its own shares; or
(B)  the surplus of the corporation for a distribution not described by Paragraph (A).
(2)  "Distribution limit," with respect to a distribution that is a purchase or redemption of its own shares by an investment company the certificate of formation of which provides that the company may purchase the company's own shares out of stated capital, means the net assets of the investment company rather than the surplus of the investment company.
(3)  "Investment company" means a corporation registered as an open-end company under the Investment Company Act.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 9 (S.B. 847), Sec. 4, eff. September 1, 2013.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter G. Distributions and Share Dividends › Section 21.302. Authority for Distributions

Sec. 21.302.  AUTHORITY FOR DISTRIBUTIONS.  (a)  The board of directors of a corporation may authorize a distribution and the corporation may make a distribution, subject to Section 21.303.
(b)  The board of directors may authorize a distribution by determining the maximum amount that may be distributed and the period during which the maximum amount may be distributed, including by setting a formula to determine the amount to be distributed.  The authorization by the board of directors for a distribution may provide that the distribution be paid:
(1)  in the amounts and at the times as stated in the authorization; or
(2)  in the manner stated in the authorization, which may include a determination or action by any person or persons, including the corporation, if the authorization states the maximum amount that may be distributed under the authorization and the period during which the maximum amount may be distributed.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2017, 85th Leg., R.S., Ch. 75 (S.B. 1518), Sec. 10, eff. September 1, 2017.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter G. Distributions and Share Dividends › Section 21.303. Limitations on Distributions

Sec. 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 11, a corporation may not make a distribution:
(1)  if the corporation would be insolvent after the distribution;  or
(2)  that exceeds the distribution limit.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter G. Distributions and Share Dividends › Section 21.304. Redemptions

Sec. 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 or all of those shares.
(b)  If less than all of the outstanding redeemable shares of a corporation subject to redemption are to be redeemed, the shares to be redeemed shall be selected for redemption:
(1)  in accordance with the corporation's certificate of formation;  or
(2)  ratably or by lot in the manner prescribed by resolution of the corporation's board of directors, if the certificate of formation does not specify how shares are to be selected for redemption.
(c)  A redemption of redeemable shares takes effect by call and written notice of the redemption of the shares.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter G. Distributions and Share Dividends › Section 21.305. Notice of Redemption

Sec. 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 or series of shares to be redeemed;
(2)  the date set for redemption;
(3)  the redemptive price;  and
(4)  the place at which the shareholders may obtain payment of the redemptive price.
(b)  The notice of redemption shall be sent to each holder of redeemable shares being called not later than the 21st day or earlier than the 60th day before the date set for redemption, unless otherwise provided by the terms of the class or series of shares contained in the certificate of formation.
(c)  A notice that is mailed is considered to have been sent when the notice is deposited in the United States mail, with postage prepaid, addressed to the shareholder at the shareholder's address as it appears on the share transfer records of the corporation.
(d)  A corporation may give the transfer agent described by Section 21.306 irrevocable instructions to send or complete the notice of redemption.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 665 (S.B. 1971), Sec. 6, eff. September 1, 2019.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter G. Distributions and Share Dividends › Section 21.306. Deposit of Money for Redemption

Sec. 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 redeemable shares of the corporation, a corporation may deposit with a bank or trust company in this or another state of the United States appointed and acting as transfer agent for the corporation an amount sufficient to redeem the shares called for redemption.  The amount must be deposited as a trust fund.
(b)  Unless the corporation's certificate of formation provides otherwise, if a corporation deposits money and gives payment instructions in accordance with Subsection (a) and Section 21.307(b):
(1)  the shares called for redemption are considered redeemed, and distributions on those shares cease to accrue on and after the date set for redemption;  and
(2)  the deposit constitutes full payment of the shares called for redemption to the holders of the shares on and after the date set for redemption.
(c)  Unless the certificate of formation provides otherwise, after the date a deposit is made and instructions are given under this section and Section 21.307(b), the shares called for redemption are not considered outstanding, and the holders of the shares cease to be shareholders of the shares and have no right with respect to the shares other than:
(1)  the right to receive payment of the redemptive price of the shares without interest from the bank or trust company;  and
(2)  any right to convert those shares.
(d)  Unless the certificate of formation provides otherwise, a bank or trust company receiving a deposit under this section shall pay to the corporation on demand the balance of the amount deposited if one or more holders of the shares called for redemption do not claim for redemption the amount deposited on or before the sixth anniversary of the date of the deposit.  After making a payment under this subsection, the bank or trust company is relieved of all responsibility to the holders with respect to the amount deposited.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter G. Distributions and Share Dividends › Section 21.307. Payment of Redeemed Shares

Sec. 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 agent described by Section 21.306 irrevocable instructions to pay, on or after the date set for redemption of redeemable shares, the redemptive price to the respective holders of the shares as evidenced by a list of shareholders certified by an officer of the corporation.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter G. Distributions and Share Dividends › Section 21.308. Priority of Distributions

Sec. 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 corporation's indebtedness issued in a distribution are at parity with the corporation's indebtedness to its general, unsecured creditors.
(b)  The indebtedness described by Subsection (a) shall be subordinated to the extent required by an agreement binding on the corporation on the date the indebtedness arises or if agreed to by the person to whom the indebtedness is owed or, with respect to indebtedness issued in a distribution, as provided by the corporation.
(c)  The indebtedness described by Subsection (a) shall be secured to the extent required by an agreement binding on the corporation.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter G. Distributions and Share Dividends › Section 21.309. Reserves, Designations, and Allocations From Surplus

Sec. 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;  or
(2)  designate or allocate in any manner a part or all of the corporation's surplus for a proper purpose.
(b)  A corporation may increase, decrease, or abolish a reserve, designation, or allocation in the manner provided by Subsection (a).
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter G. Distributions and Share Dividends › Section 21.310. Authority for Share Dividends

Sec. 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 any restriction in its certificate of formation.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter G. Distributions and Share Dividends › Section 21.311. Limitations on Share Dividends

Sec. 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 than the amount required by Section 21.313 to be transferred to stated capital at the time the share dividend is made;  or
(2)  the share dividend will be made to a holder of shares of any other class or series, unless:
(A)  the corporation's certificate of formation provides for the dividend;  or
(B)  the share dividend is authorized by the holders of at least a majority of the outstanding shares of the class or series in which the share dividend is to be made.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter G. Distributions and Share Dividends › Section 21.312. Value of Shares Issued as Share Dividends

Sec. 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)  A share dividend payable in authorized but unissued shares without par value shall be issued at the value set by the board of directors when the share dividend is authorized.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter G. Distributions and Share Dividends › Section 21.313. Transfer of Surplus for Share Dividends

Sec. 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 the corporation's board of directors that is not less than the aggregate par value of the shares issued as a share dividend shall be transferred to stated capital.
(b)  When a share dividend payable in authorized but unissued shares without par value is made by a corporation, an amount of surplus equal to the aggregate value set by the corporation's board of directors with respect to shares under Section 21.312(b) shall be transferred to stated capital.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter G. Distributions and Share Dividends › Section 21.314. Determination of Solvency, Net Assets, Stated Capital, and Surplus

Sec. 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 amount of a corporation's stated capital or surplus, the value of the corporation's net assets, and the amount or value of any component of the corporation's stated capital, surplus, or net assets, may be based on:
(1)  financial statements of the corporation, which may include financial statements of subsidiary entities or other entities accounted for on a consolidated basis or on the equity method of accounting, that:
(A)   present the financial condition of the corporation, and any subsidiary or other entities included in those financial statements, in accordance with generally accepted accounting principles or international financial reporting standards; or
(B)  have been prepared using the method of accounting used to file the corporation's federal income tax return or using any other accounting practices and principles that are reasonable under the circumstances;
(2)  financial information, including condensed or summary financial statements, that is prepared on the same basis as financial statements described by Subdivision (1);
(3)  a projection, a forecast, or other forward-looking information relating to the future economic performance, financial condition, or liquidity of the corporation that is reasonable under the circumstances;
(4)  a fair valuation or information from any other method that is reasonable under the circumstances; or
(5)  a combination of a statement, a valuation, or information authorized by this section.
(b)  Subsection (a) does not apply to the computation of the Texas franchise tax or any other tax imposed on a corporation under the laws of this state.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2021, 87th Leg., R.S., Ch. 39 (S.B. 1203), Sec. 21, eff. September 1, 2021.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter G. Distributions and Share Dividends › Section 21.315. Date of Determination of Solvency, Net Assets, Stated Capital, and Surplus

Sec. 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 determination of the value of a corporation's net assets, stated capital, or surplus, or each component of net assets, stated capital, or surplus, shall be made:
(1)  on the date the distribution or share dividend is authorized by the corporation's board of directors if the distribution or share dividend is made not later than the 120th day after the date of authorization;  or
(2)  if the distribution or share dividend is made more than 120 days after the date of authorization:
(A)  on the date designated by the corporation's board of directors if the date so designated is not earlier than 120 days before the date the distribution or share dividend is made;  or
(B)  on the date the distribution or share dividend is made if the corporation's board of directors does not designate a date as described in Paragraph (A).
(b)  For purposes of this section, a distribution that involves:
(1)  the incurrence by a corporation of indebtedness or a deferred payment obligation is considered to have been made on the date the indebtedness or obligation is incurred;  or
(2)  a requirement in the corporation's certificate of formation or other contract of the corporation to redeem, exchange, or otherwise acquire any of its own shares is considered to have been made either on the date when the provision or other contract is made or takes effect or on the date when the shares to be redeemed, exchanged, or acquired are redeemed, exchanged, or acquired, at the option of the corporation.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter G. Distributions and Share Dividends › Section 21.316. Liability of Directors for Wrongful Distributions

Sec. 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 Section 21. 303 are jointly and severally liable to the corporation for the amount by which the distribution exceeds the amount permitted by that section to be distributed.
(b)  A director is not liable for all or part of the excess amount if a distribution of that amount would have been permitted by Section 21.303 after the date the director authorized the distribution.
(c)  A director is not jointly and severally liable under Subsection (a) if, in voting for or assenting to the distribution, the director:
(1)  relies in good faith and with ordinary care on:
(A)  the statements, valuations, or information described by Section 21.314;  or
(B)  other information, opinions, reports, or statements, including financial statements and other financial data, concerning the corporation or another person that are prepared or presented by:
(i)  one or more officers or employees of the corporation;
(ii)  a legal counsel, public accountant, investment banker, or other person relating to a matter the director reasonably believes is within the person's professional or expert competence;  or
(iii)  a committee of the board of directors of which the director is not a member;
(2)  acting in good faith and with ordinary care, considers the assets of the corporation to be valued at least at their book value;  or
(3)  in determining whether the corporation made adequate provision for payment, satisfaction, or discharge of all of the corporation's liabilities and obligations, as provided by Sections 11.053 and 11.356, relies in good faith and with ordinary care on financial statements of, or other information concerning, a person who was or became contractually obligated to pay, satisfy, or discharge some or all of the corporation's liabilities or obligations.
(d)  The liability imposed under Subsection (a) is the only liability of a director to the corporation or its creditors for authorizing a distribution that is prohibited by Section 21.303.
(e)  This section and Sections 21.317 and 21.318 do not limit any liability imposed under Chapter 24, Business & Commerce Code, or the United States Bankruptcy Code.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter G. Distributions and Share Dividends › Section 21.317. Statute of Limitations on Action for Wrongful Distribution

Sec. 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 giving rise to the liability occurred.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter G. Distributions and Share Dividends › Section 21.318. Contribution From Certain Shareholders and Directors

Sec. 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 the wrongful distribution knowing that it was prohibited by Section 21.303 in proportion to the amounts received by the shareholders.
(b)  A director who is liable for a claim asserted under Section 21.316 is entitled to receive contributions from each of the other directors who are liable with respect to that claim in an amount appropriate to achieve equity.
(c)  The liability provided by Subsection (a) is the only liability of a shareholder to the corporation or a creditor of the corporation for accepting or receiving a distribution by the corporation that is prohibited by Section 21.303, except for any liability under Chapter 24, Business & Commerce Code, or the United States Bankruptcy Code.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter H. Shareholders' Meetings; Notice to Shareholders; Voting and Quorum › Section 21.351. Annual Meeting

Sec. 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 the corporation's bylaws.
(b)  On the application of a shareholder who has previously submitted a written request to the corporation that an annual meeting be held, a court in the county in which the principal executive office of the corporation is located may order a meeting to be held if the annual meeting is not held or written consent instead of the annual meeting is not executed within any 13-month period, unless the meeting is not required to be held under Section 21.655.
(c)  The failure to hold an annual meeting at the designated time does not result in the winding up or termination of the corporation.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter H. Shareholders' Meetings; Notice to Shareholders; Voting and Quorum › Section 21.352. Special Meetings

Sec. 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 authorized to call special meetings by the certificate of formation or bylaws of the corporation;  or
(2)  the holders of the percentage of shares specified in the certificate of formation, not to exceed 50 percent of the shares entitled to vote or, if no percentage is specified, at least 10 percent of all of the shares of the corporation entitled to vote at the proposed special meeting.
(b)  Unless stated in or set in accordance with the bylaws, the record date for determining which shareholders of the corporation are entitled to call a special meeting is the date the first shareholder signs the notice of that meeting.
(c)  Other than procedural matters, the only business that may be conducted at a special meeting of the shareholders is business that is within the purposes described in the notice required by Section 21.353.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter H. Shareholders' Meetings; Notice to Shareholders; Voting and Quorum › Section 21.3521. Shareholder Meetings by Remote Communication

Sec. 21.3521.  SHAREHOLDER MEETINGS BY REMOTE COMMUNICATION.  Except for any limitation or other requirements in the governing documents of the corporation, if a meeting of a corporation's shareholders under Section 21.351 or 21.352 is held by means of a telephone conference or other communication system authorized by Section 6.002, the meeting is considered to have satisfied the requirement of Section 6.002(a) that shareholders participating in the meeting be able to communicate with all other persons participating in the meeting if the corporation implements reasonable measures to provide each shareholder entitled to vote at the meeting, or the shareholder's proxyholder, a reasonable opportunity to:
(1)  vote on matters submitted to the shareholders; and
(2)  read or hear the proceedings of the meeting substantially concurrently with those proceedings.
Added by Acts 2021, 87th Leg., R.S., Ch. 39 (S.B. 1203), Sec. 22, eff. September 1, 2021.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter H. Shareholders' Meetings; Notice to Shareholders; Voting and Quorum › Section 21.353. Notice of Meeting

Sec. 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 to each shareholder entitled to vote at the meeting not later than the 10th day and not earlier than the 60th day before the date of the meeting.  Notice shall be given at the direction of the president, secretary, or other person calling the meeting.
(b)  The notice of a special meeting must contain a statement regarding the purpose or purposes of the meeting.
(c)  If a meeting is held by means of remote communication, the notice of the meeting must include information on how to access the list of shareholders entitled to vote at the meeting required by Section 21.372.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2005, 79th Leg., Ch. 64 (H.B. 1319), Sec. 51, eff. January 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter H. Shareholders' Meetings; Notice to Shareholders; Voting and Quorum › Section 21.3531. Notice by Electronic Transmission

Sec. 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 shareholder by electronic transmission.  The shareholder may specify the form of electronic transmission to be used to communicate notice.
(b)  Notice is considered provided under this section when the notice is:
(1)  transmitted to a facsimile number provided by the shareholder for the purpose of receiving notice;
(2)  transmitted to an electronic mail address provided by the shareholder for the purpose of receiving notice;
(3)  posted on an electronic network and a message is sent to the shareholder at the address provided by the shareholder for the purpose of alerting the shareholder of a posting; or
(4)  communicated to the shareholder by any other form of electronic transmission consented to by the shareholder.
(c)  A shareholder may revoke the shareholder's consent to receive notice by electronic transmission by providing written notice to the corporation.  The shareholder's consent is considered revoked for purposes of Subsection (a) if the corporation is unable to deliver by electronic transmission two consecutive notices, and the secretary, assistant secretary, or transfer agent of the corporation, or another person responsible for delivering notice on behalf of the corporation, knows that delivery of those two electronic transmissions was unsuccessful.  Inadvertent failure to treat the unsuccessful transmissions as a revocation of the shareholder's consent does not affect the validity of a meeting or other action.
(d)  An affidavit of the secretary, assistant secretary, transfer agent, or other agent of a corporation stating that notice has been provided to a shareholder of the corporation by electronic transmission is, in the absence of fraud, prima facie evidence that the notice was provided under this section.
Added by Acts 2005, 79th Leg., Ch. 64 (H.B. 1319), Sec. 52, eff. January 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter H. Shareholders' Meetings; Notice to Shareholders; Voting and Quorum › Section 21.354. Inspection of Voting List

Sec. 21.354.  INSPECTION OF VOTING LIST.
(a)  The list of shareholders entitled to vote at the meeting prepared under Section 21.372 shall be subject to inspection by a shareholder during regular business hours.
(a-1)  Repealed by Acts 2023, 88th Leg., R.S., Ch. 27 (S.B. 1514), Sec. 59(3), eff. September 1, 2023.
(b)  The original share transfer records are prima facie evidence of which shareholders are entitled to inspect the list.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2005, 79th Leg., Ch. 64 (H.B. 1319), Sec. 53, eff. January 1, 2006.
Acts 2023, 88th Leg., R.S., Ch. 27 (S.B. 1514), Sec. 28, eff. September 1, 2023.
Acts 2023, 88th Leg., R.S., Ch. 27 (S.B. 1514), Sec. 59(3), eff. September 1, 2023.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter H. Shareholders' Meetings; Notice to Shareholders; Voting and Quorum › Section 21.355. Closing of Share Transfer Records

Sec. 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 meeting of shareholders shall remain closed for at least 10 days immediately preceding the date of the meeting.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter H. Shareholders' Meetings; Notice to Shareholders; Voting and Quorum › Section 21.356. Record Date for Written Consent to Action

Sec. 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 adopts the resolution setting the record date.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter H. Shareholders' Meetings; Notice to Shareholders; Voting and Quorum › Section 21.357. Record Date for Purpose of Shareholders' Meeting

Sec. 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 meeting, as provided by the directors in accordance with Section 6.101, must be at least 10 days before the date of the shareholders' meeting.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 139 (S.B. 748), Sec. 26, eff. September 1, 2011.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter H. Shareholders' Meetings; Notice to Shareholders; Voting and Quorum › Section 21.358. Quorum

Sec. 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 that are present or represented by proxy at the meeting are a quorum for the consideration of a matter to be presented at that meeting.
(b)  The certificate of formation of a corporation may provide that a quorum is present only if:
(1)  the holders of a specified portion of the shares that is greater than the majority of the shares entitled to vote are represented at the meeting in person or by proxy;  or
(2)  the holders of a specified portion of the shares that is less than the majority but not less than one-third of the shares entitled to vote are represented at the meeting in person or by proxy.
(c)  Unless provided by the certificate of formation or bylaws of the corporation, after a quorum is present at a meeting of shareholders, the shareholders may conduct business properly brought before the meeting until the meeting is adjourned.  The subsequent withdrawal from the meeting of a shareholder or the refusal of a shareholder present at or represented by proxy at the meeting to vote does not negate the presence of a quorum at the meeting.
(d)  Unless provided by the certificate of formation or bylaws, the shareholders of the corporation at a meeting at which a quorum is not present may adjourn the meeting until the time and to the place as may be determined by a vote of the holders of the majority of the shares who are present or represented by proxy at the meeting.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter H. Shareholders' Meetings; Notice to Shareholders; Voting and Quorum › Section 21.359. Voting in Election of Directors

Sec. 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 to vote in the election of directors at a meeting of shareholders at which a quorum is present.
(b)  The certificate of formation or bylaws of a corporation may provide that a director of a corporation shall be elected only if the director receives:
(1)  the vote of the holders of a specified portion, but not less than the majority, of the shares entitled to vote in the election of directors;
(2)  the vote of the holders of a specified portion, but not less than the majority, of the shares entitled to vote in the election of directors and represented in person or by proxy at a meeting of shareholders at which a quorum is present;  or
(3)  the vote of the holders of a specified portion, but not less than the majority, of the votes cast by the holders of shares entitled to vote in the election of directors at a meeting of shareholders at which a quorum is present.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter H. Shareholders' Meetings; Notice to Shareholders; Voting and Quorum › Section 21.360. No Cumulative Voting Right Unless Authorized

Sec. 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.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter H. Shareholders' Meetings; Notice to Shareholders; Voting and Quorum › Section 21.361. Cumulative Voting in Election of Directors

Sec. 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 shares owned by the shareholder for as many candidates as there are directors to be elected and for whose election the shareholder is entitled to vote; or
(2)  if expressly authorized by a corporation's certificate of formation in general or with respect to a specified class or series of shares or group of classes or series of shares and subject to Subsections (b) and (c), cumulate votes by:
(A)  giving one candidate as many votes as the total of the number of the directors to be elected multiplied by the shareholder's shares; or
(B)  distributing the votes among one or more candidates using the same principle.
(b)  Cumulative voting permitted by the certificate of formation is permitted only in an election of directors in which a shareholder who intends to cumulate votes has given written notice of that intention to the secretary of the corporation on or before the day preceding the date of the election at which the shareholder intends to cumulate votes.
(c)  All shareholders entitled to vote cumulatively may cumulate their votes if a shareholder gives the notice required by Subsection (b).
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2009, 81st Leg., R.S., Ch. 84 (S.B. 1442), Sec. 35, eff. September 1, 2009.
2023 Texas Statutes › Business Organizations Code › Title 2 - Corporations › Chapter 21 - For-Profit Corporations › Subchapter H. Shareholders' Meetings; Notice to Shareholders; Voting and Quorum › Section 21.362. Cumulative Voting Right in Certain Corporations

Sec. 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 the number of shares the shareholder owns in the election of directors to the extent permitted and in the manner provided by Section 21.361.  A corporation may limit or deny a shareholder's right to cumulatively vote shares at any time after September 1, 2003, by amending its certificate of formation.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2005, 79th Leg., Ch. 64 (H.B. 1319), Sec. 54, eff. January 1, 2006.