Title BO, Business Organizations Code

Sec. 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 of the corporation may file with the secretary of state, in a…

Sec. 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 a successor or transferee of the holder, if: (1…

Sec. 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 of survivorship and one of the owners dies, the corporation may record on its books and effect the transfer of the…

Sec. 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 the owner of a share in the share transfer records of the corporation at a p…

Sec. 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 for the shares or distribution from another person is discha…

Sec. 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 shares or subscription has not been paid may not be held per…

Sec. 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 represented by the beneficial interest. (b) On written demand stating a proper purpose, a holder of shares of a…

Sec. 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 the last fiscal year that contain in reasonable detail the corporat…

Sec. 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 shareholders, keep the list on file for a 10-day period before the annual meeting, or ke…

Sec. 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 agent did not receive notice of a meeting of shareholders within a sufficient…

Sec. 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 is liable to the shareholder for any cost or expense…

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 …

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 preempt…

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 obl…

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 pers…

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 shar…

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 corporatio…

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) Th…

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…

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 …

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 tha…

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 …

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 corporat…

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 …

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 thi…

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 …

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 indebt…

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 corpo…

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, ef…

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 sha…

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 b…

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…

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…

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'…

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 …

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.…

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 …

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 corp…

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 …

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 oth…

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 tha…

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 electron…

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.…

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 immediate…

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, e…

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,…