Title BO, Business Organizations Code

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,…

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 …

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 prese…

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.

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…

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 th…

Sec. 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 the holders of a specified portion of the shares entitled to vote is require…

Sec. 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 requiring winding up in accordance with Section 11.152(b); (2)…

Sec. 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 required by this code, the certificate of formation of a corporation may provide that the…

Sec. 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 one vote on each matter submitted to a vote at a shareholders' meeting. (b) If the certi…

Sec. 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 electronic transmission, including telephonic transmission, by the shareholder, or a photographic…

Sec. 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., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 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 agreed to purchase the shares subject to the proxy; (3) a person who owns or holds an option to purchase …

Sec. 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 noted conspicuously on the certificate representing the shares subject to the proxy; or (2) in…

Sec. 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 are held of record by a bank, broker, or other nomin…

Sec. 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 alphabetical list of the shareholders entitled to vote at the meeting or at any adjournment of the meeting shall be prepared by or on be…

Sec. 21.373. NATIONALLY LISTED CORPORATIONS: SHAREHOLDER PROPOSALS. (a) In this section: (1) "Nationally listed corporation" means a corporation that: (A) has a class of equity securities registered under Section 12(b) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78l…

Sec. 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 the powers of the corporation; and (2) direct the management of the business and affai…

Sec. 21.402. BOARD MEMBER ELIGIBILITY REQUIREMENTS. Unless the certificate of formation or bylaws of a corporation provide otherwise, a director is not required to be a resident of this state or a shareholder of the corporation. The certificate of formation or bylaws may prescrib…

Sec. 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 board of directors, the number of directors shall be set by, or in the manner provided by, the certificate of formation…

Sec. 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 name and address of each individual who will serve as director until the first annual meeting of share…