Validity and Enforceability of Shareholders' Agreement

Sec. 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 restriction imposed on the discretion or powers of the board of directors or other person empowered to manage the close corporation; and (3) that the effect of the shareholders' agreement is to treat the business and affairs of the close corporation as if the close corporation were a partnership or in a manner that would otherwise be appropriate only among partners. (b) A close corporation, a shareholder of the close corporation, or a party to a shareholders' agreement may initiate a proceeding to enforce the shareholders' agreement in accordance with Section 21.756. Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.