Title BO, Business Organizations Code

Sec. 21.409. REMOVAL OF DIRECTORS. (a) Except as otherwise provided by the certificate of formation or bylaws of a corporation or this subchapter, the shareholders of the corporation may remove a director or the entire board of directors of the corporation, with or without cause,…

Sec. 21.4091. RESIGNATION OF DIRECTORS. (a) Except as otherwise provided by the certificate of formation or bylaws, a director of a corporation may resign at any time by providing written notice to the corporation. (b) The director's resignation takes effect on the date the notic…

Sec. 21.410. VACANCY. (a) A vacancy occurring in the initial board of directors before the issuance of shares may be filled by the affirmative vote or written consent of the majority of the organizers or by the affirmative vote of the majority of the remaining directors, even if …

Sec. 21.411. NOTICE OF MEETING. (a) Regular meetings of the board of directors of a corporation may be held with or without notice as prescribed by the corporation's bylaws. (b) Special meetings of the board of directors shall be held with notice as prescribed by the bylaws. (c) …

Sec. 21.412. WAIVER OF NOTICE. (a) If the bylaws of a corporation require notice of a meeting to be given to a director, a written waiver of the notice signed by the director entitled to the notice, before or after the meeting, is equivalent to the giving of the notice. (b) The a…

Sec. 21.413. QUORUM. (a) A quorum of the board of directors is the majority of the number of directors set or established in the manner provided by the certificate of formation or bylaws of a corporation unless the laws of this state, the certificate of formation, or the bylaws r…

Sec. 21.414. DISSENT TO OR ABSTENTION FROM ACTION. (a) A director of a corporation who is present at a meeting of the board of directors at which action has been taken is presumed to have assented to the action taken unless: (1) the director's dissent or abstention has been enter…

Sec. 21.415. ACTION BY DIRECTORS. (a) The act of a majority of the directors present at a meeting at which a quorum is present at the time of the act is the act of the board of directors of a corporation, unless the act of a greater number is required by the certificate of format…

Sec. 21.416. COMMITTEES OF BOARD OF DIRECTORS. (a) If authorized by the certificate of formation or bylaws of a corporation, the board of directors of the corporation may designate: (1) committees composed of one or more directors; or (2) directors as alternate members of committ…

Sec. 21.4161. DETERMINATION OF INDEPENDENT AND DISINTERESTED DIRECTORS. (a) A corporation that adopts a resolution to authorize the formation of a committee of independent and disinterested directors under Section 21.416(g) may petition a court having jurisdiction to hold an evid…

Sec. 21.417. ELECTION OF OFFICERS. The board of directors of a corporation shall elect a president and a secretary at the time and in the manner prescribed by the corporation's bylaws. Other officers, including assistant officers and agents as deemed necessary, may be elected in …

Sec. 21.418. CONTRACTS OR TRANSACTIONS INVOLVING INTERESTED DIRECTORS AND OFFICERS. (a) This section applies to a contract or transaction between a corporation and: (1) one or more directors or officers, or one or more affiliates or associates of one or more directors or officers…

Sec. 21.419. PRESUMPTIONS FOR DIRECTORS AND OFFICERS OF CERTAIN CORPORATIONS. (a) This section applies only to a corporation that has: (1) a class or series of voting shares listed on a national securities exchange; or (2) included in its governing documents a statement affirmati…

Sec. 21.451. DEFINITIONS. In this subchapter: (1) "Participating shares" means shares that entitle the holders of the shares to participate without limitation in distributions. (2) "Sale of all or substantially all of the assets" means the sale, lease, exchange, or other disposit…

Sec. 21.452. APPROVAL OF MERGER. (a) A corporation that is a party to the merger under Chapter 10 must approve the merger by complying with this section. (b) The board of directors of the corporation shall adopt a resolution that: (1) approves the plan of merger; and (2) if share…

Sec. 21.453. APPROVAL OF CONVERSION. (a) A corporation must approve a conversion under Chapter 10 by complying with this section. (b) The board of directors of the corporation shall adopt a resolution that approves the plan of conversion and: (1) recommends that the plan of conve…

Sec. 21.454. APPROVAL OF EXCHANGE. (a) A corporation the shares of which are to be acquired in an exchange under Chapter 10 must approve the exchange by complying with this section. (b) The board of directors shall adopt a resolution that approves the plan of exchange and: (1) re…

Sec. 21.455. APPROVAL OF SALE OF ALL OR SUBSTANTIALLY ALL OF ASSETS. (a) Except as provided by the certificate of formation of a domestic corporation, a sale, lease, pledge, mortgage, assignment, transfer, or other conveyance of an interest in real property or other assets of the…

Sec. 21.456. GENERAL PROCEDURE FOR SUBMISSION TO SHAREHOLDERS OF FUNDAMENTAL BUSINESS TRANSACTION. (a) If a fundamental business transaction involving a corporation is required to be submitted to the shareholders of the corporation under this subchapter, the corporation shall not…

Sec. 21.457. GENERAL VOTE REQUIREMENT FOR APPROVAL OF FUNDAMENTAL BUSINESS TRANSACTION. (a) Except as provided by this code or the certificate of formation of a corporation in accordance with Section 21.365, the affirmative vote of the holders of at least two-thirds of the outsta…

Sec. 21.458. CLASS VOTING REQUIREMENTS FOR CERTAIN FUNDAMENTAL BUSINESS TRANSACTIONS. (a) Separate voting by a class or series of shares of a corporation is required for approval of a plan of merger or conversion if: (1) that class or series of shares is, under the plan of merger…

Sec. 21.459. NO SHAREHOLDER VOTE REQUIREMENT FOR CERTAIN FUNDAMENTAL BUSINESS TRANSACTIONS. (a) Unless required by the corporation's certificate of formation, a plan of merger is not required to be approved by the shareholders of a corporation if: (1) the corporation is the sole …

Sec. 21.460. RIGHTS OF DISSENT AND APPRAISAL. A shareholder of a domestic corporation has the rights of dissent and appraisal under Subchapter H, Chapter 10, with respect to a fundamental business transaction. Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 21.461. PLEDGE, MORTGAGE, DEED OF TRUST, OR TRUST INDENTURE. Except as provided by the corporation's certificate of formation: (1) the board of directors of a corporation may authorize a pledge, mortgage, deed of trust, or trust indenture; and (2) an authorization or consent…

Sec. 21.462. CONVEYANCE BY CORPORATION. A corporation may convey real property of the corporation when authorized by appropriate resolution of the board of directors. Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006. SUBCHAPTER K. WINDING UP AND TERMINATION

Sec. 21.501. APPROVAL OF VOLUNTARY WINDING UP, REINSTATEMENT, OR REVOCATION OF VOLUNTARY WINDING UP. A corporation must approve a voluntary winding up in accordance with Chapter 11, a reinstatement in accordance with Section 11.202, a cancellation of an event requiring winding up…

Sec. 21.502. CERTAIN PROCEDURES RELATING TO WINDING UP. To approve a voluntary winding up, a reinstatement, a cancellation of an event requiring winding up, or a revocation of a voluntary decision to wind up, a corporation must follow one of the following procedures: (1) all shar…

Sec. 21.503. MEETING OF SHAREHOLDERS; NOTICE. (a) Each shareholder of record entitled to vote at a meeting described by Section 21.502(3)(A)(ii) must be given written notice stating that the purpose or one of the purposes of the meeting is to consider the winding up, reinstatemen…

Sec. 21.504. RESPONSIBILITY FOR WINDING UP. If a corporation determines or is required to wind up, the directors of the corporation shall manage the process of winding up the business or affairs of the corporation. Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006. SUBCHAP…

Sec. 21.551. DEFINITIONS. In this subchapter: (1) "Derivative proceeding" means a civil suit in the right of a domestic corporation or, to the extent provided by Section 21.562, in the right of a foreign corporation. (2) "Shareholder" includes: (A) a shareholder as defined by Sec…

Sec. 21.552. STANDING TO BRING PROCEEDING. (a) Subject to Subsection (b), a shareholder may not institute or maintain a derivative proceeding unless: (1) the shareholder: (A) was a shareholder of the corporation at the time of the act or omission complained of; or (B) became a sh…

Sec. 21.553. DEMAND. (a) A shareholder may not institute a derivative proceeding until the 91st day after the date a written demand is filed with the corporation stating with particularity the act, omission, or other matter that is the subject of the claim or challenge and reques…

Sec. 21.554. DETERMINATION BY DIRECTORS OR INDEPENDENT PERSONS. (a) A determination of how to proceed on allegations made in a demand or petition relating to a derivative proceeding must be made by an affirmative vote of the majority of: (1) all independent and disinterested dire…

Sec. 21.555. STAY OF PROCEEDING. (a) If the corporation that is the subject of a derivative proceeding commences an inquiry into the allegations made in a demand or petition and the person or group of persons described by Section 21.554 is conducting an active review of the alleg…

Sec. 21.556. DISCOVERY. (a) If a corporation proposes to dismiss a derivative proceeding under Section 21.558, discovery by a shareholder after the filing of the derivative proceeding in accordance with this subchapter shall be limited to: (1) facts relating to whether the person…

Sec. 21.557. TOLLING OF STATUTE OF LIMITATIONS. A written demand filed with the corporation under Section 21.553 tolls the statute of limitations on the claim on which demand is made until the later of: (1) the 31st day after the expiration of any waiting period under Section 21.…

Sec. 21.558. DISMISSAL OF DERIVATIVE PROCEEDING. (a) A court, sitting in equity as the finder of fact, shall dismiss a derivative proceeding on a motion by the corporation if the person or group of persons described by Section 21.554 determines in good faith, after conducting a r…

Sec. 21.559. ALLEGATIONS AFTER DEMAND REJECTED. If a derivative proceeding is instituted after a demand is rejected, the petition must allege with particularity facts that establish that the rejection was not made in accordance with the requirements and standards under Sections 2…

Sec. 21.560. DISCONTINUANCE OR SETTLEMENT. (a) A derivative proceeding may not be discontinued or settled without court approval. (b) The court shall direct that notice be given to the affected shareholders if the court determines that a proposed discontinuance or settlement may …

Sec. 21.561. PAYMENT OF EXPENSES. (a) In this section, "expenses" means reasonable expenses incurred by a party in a derivative proceeding, including: (1) attorney's fees; (2) costs in pursuing an investigation of the matter that was the subject of the derivative proceeding; or (…

Sec. 21.562. APPLICATION TO FOREIGN CORPORATIONS. (a) In a derivative proceeding brought in the right of a foreign corporation, the matters covered by this subchapter are governed by the laws of the jurisdiction of formation of the foreign corporation, except for Sections 21.555,…

Sec. 21.563. CLOSELY HELD CORPORATION. (a) In this section, "closely held corporation" means a corporation that has: (1) fewer than 35 shareholders; and (2) no shares listed on a national securities exchange or regularly quoted in an over-the-counter market by one or more members…

Sec. 21.601. DEFINITIONS. In this subchapter: (1) "Issuing public corporation" means a domestic corporation that has: (A) 100 or more shareholders of record as shown by the share transfer records of the corporation; (B) a class or series of the corporation's voting shares registe…

Sec. 21.602. AFFILIATED SHAREHOLDER. (a) For purposes of this subchapter, a person, other than the issuing public corporation or a wholly owned subsidiary of the issuing public corporation, is an affiliated shareholder if the person: (1) is the beneficial owner of 20 percent or m…

Sec. 21.603. BENEFICIAL OWNER OF SHARES OR OTHER SECURITIES. (a) For purposes of this subchapter, a person is a beneficial owner of shares or other securities if the person individually, or through an affiliate or associate, directly or indirectly beneficially owns the shares or …

Sec. 21.604. BUSINESS COMBINATION. A business combination is: (1) a merger, share exchange, or conversion of an issuing public corporation or a subsidiary with: (A) an affiliated shareholder; (B) a foreign or domestic corporation or other entity that is, or after the merger, shar…