Title BO, Business Organizations Code

Sec. 21.762. POWERS AND DUTIES OF CUSTODIAN. A person who qualifies as a custodian has all of the powers and duties and the title of a receiver appointed under Sections 11.404-11.406. The custodian shall continue the business of the close corporation and may not liquidate the aff…

Sec. 21.763. TERMINATION OF CUSTODIANSHIP. If the condition requiring the appointment of a custodian is remedied other than by liquidation or winding up and termination, the court shall terminate the custodianship immediately and management of the close corporation shall be resto…

Sec. 21.801. SHARES AND OTHER SECURITIES ARE PERSONAL PROPERTY. Except as otherwise provided by this code, the shares and other securities of a corporation are personal property. Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 21.802. PENALTIES FOR LATE FILING OF CERTAIN INSTRUMENTS. (a) A person required under Title 1 or this title to file a change of registered office or agent, a certificate of voluntary withdrawal, or a certificate of termination for a corporation commits an offense if the pers…

Sec. 21.901. DEFINITIONS. In this subchapter: (1) "Corporate statute," with respect to an action or filing, means this code, the former Texas Business Corporation Act, or any predecessor statute of this state that governed the action or the filing. (2) "Defective corporate act" m…

Sec. 21.902. RATIFICATION OF DEFECTIVE CORPORATE ACT AND PUTATIVE SHARES. (a) Except as provided by Subsection (b) and subject to Section 21.909 or 21.910, a defective corporate act or putative shares are not ineffective, void, or voidable solely as a result of a failure of autho…

Sec. 21.903. RATIFICATION OF DEFECTIVE CORPORATE ACT; ADOPTION OF RESOLUTIONS. (a) To ratify one or more defective corporate acts, the board of directors of the corporation shall adopt resolutions stating: (1) the defective corporate act or acts to be ratified; (2) the date of ea…

Sec. 21.904. QUORUM AND VOTING REQUIREMENTS FOR ADOPTION OF RESOLUTIONS. (a) The quorum and voting requirements applicable to the adoption of the resolutions to ratify a defective corporate act under Section 21.903 are the same as the quorum and voting requirements applicable at …

Sec. 21.905. SHAREHOLDER APPROVAL OF RATIFIED DEFECTIVE CORPORATE ACT REQUIRED; EXCEPTION. Each defective corporate act ratified under Section 21.903 must be submitted to shareholders for approval as provided by Sections 21.906 and 21.907, unless: (1)(A) no other provision of the…

Sec. 21.906. NOTICE REQUIREMENTS FOR RATIFIED DEFECTIVE CORPORATE ACT SUBMITTED FOR SHAREHOLDER APPROVAL. (a) If the ratification of a defective corporate act is required to be submitted to the shareholders for approval under Section 21.905, notice of the time, place, if any, and…

Sec. 21.907. SHAREHOLDER MEETING; QUORUM AND VOTING. (a) At the shareholder meeting, the quorum and voting requirements applicable to the approval of the ratification of a defective corporate act under Section 21.905 are the same as the quorum and voting requirements applicable a…

Sec. 21.908. CERTIFICATE OF VALIDATION. (a) The corporation shall file a certificate of validation with respect to the defective corporate act in accordance with Chapter 4, if: (1) a defective corporate act ratified under this subchapter would have required under any other provis…

Sec. 21.909. ADOPTION OF RESOLUTIONS; EFFECT ON DEFECTIVE CORPORATE ACT. On or after the validation effective time, unless determined otherwise in an action brought under Section 21.914 and subject to Sections 21.902(b) and 21.907(e), each defective corporate act ratified in acco…

Sec. 21.910. ADOPTION OF RESOLUTIONS; EFFECT ON PUTATIVE SHARES. On or after the validation effective time, unless determined otherwise in an action brought under Section 21.914 and subject to Sections 21.902(b) and 21.907(e), each putative share or fraction of a putative share i…

Sec. 21.911. NOTICE TO SHAREHOLDERS FOLLOWING RATIFICATION OF DEFECTIVE CORPORATE ACT. (a) For each defective corporate act ratified by the board of directors under Sections 21.903 and 21.904, notice of the ratification shall be given promptly to: (1) each holder of valid shares …

Sec. 21.912. VALID SHARES OR PUTATIVE SHARES. In the absence of actual fraud in the transaction, the judgment of the board of directors of a corporation that shares of the corporation are valid shares or putative shares is conclusive, unless otherwise determined by the district c…

Sec. 21.913. RATIFICATION PROCEDURES OR COURT PROCEEDINGS CONCERNING VALIDATION NOT EXCLUSIVE. (a) Ratification of an act or transaction under this subchapter or validation of an act or transaction as provided by Sections 21.914 through 21.917 is not the exclusive means of ratify…

Sec. 21.914. PROCEEDING REGARDING VALIDITY OF DEFECTIVE CORPORATE ACTS AND SHARES. (a) The following may bring an action under this section: (1) the corporation; (2) any successor entity to the corporation; (3) any member of the corporation's board of directors; (4) any record or…

Sec. 21.915. EXCLUSIVE JURISDICTION. Subject to Section 1.056, the district court has exclusive jurisdiction to hear and determine any action brought under Section 21.914. Added by Acts 2015, 84th Leg., R.S., Ch. 32 (S.B. 860), Sec. 30, eff. September 1, 2015. Amended by: Acts 20…

Sec. 21.916. SERVICE. (a) Service of an application filed under Section 21.914 on the registered agent of a corporation or in any other manner permitted by applicable law is considered to be service on the corporation, and no other party need be joined in order for the district c…

Sec. 21.917. STATUTE OF LIMITATIONS. (a) This section does not apply to: (1) an action asserting that a ratification was not accomplished in accordance with this subchapter; or (2) any person to whom notice of the ratification was not given as required by Sections 21.906 and 21.9…

Sec. 21.951. LAW APPLICABLE TO PUBLIC BENEFIT CORPORATIONS; FORMATION. (a) A for-profit corporation may elect under Section 3.007(e) to be a public benefit corporation that is governed by this subchapter. (b) If a corporation elects to be a public benefit corporation, the corpora…

Sec. 21.952. DEFINITIONS. In this subchapter: (1) "Public benefit" means a positive effect, or a reduction of a negative effect, on one or more categories of persons, entities, communities, or interests, other than shareholders in their capacities as shareholders of the corporati…

Sec. 21.953. PURPOSE OF PUBLIC BENEFIT CORPORATION; NAME OF CORPORATION. (a) A public benefit corporation is a domestic for-profit corporation that is intended to produce a public benefit or benefits and to operate in a responsible and sustainable manner. (b) To accomplish the pu…

Sec. 21.954. CERTAIN AMENDMENTS, MERGERS, EXCHANGES, AND CONVERSIONS; VOTER APPROVAL REQUIRED. (a) Notwithstanding any other provision of this chapter, a domestic for-profit corporation that is not a public benefit corporation may not, without the approval of the owners of two-th…

Sec. 21.955. STOCK CERTIFICATES; NOTICES REGARDING UNCERTIFICATED STOCK. (a) A stock certificate issued by a public benefit corporation must note conspicuously that the corporation is a public benefit corporation governed by this subchapter. (b) A notice sent to any person under …

Sec. 21.956. DUTIES OF DIRECTORS. (a) The board of directors of a public benefit corporation shall manage or direct the business and affairs of the corporation in a manner that balances: (1) the pecuniary interests of the shareholders; (2) the best interests of those persons mate…

Sec. 21.957. PERIODIC STATEMENTS. (a) A public benefit corporation shall include in each notice of a meeting of shareholders a statement to the effect that the corporation is a public benefit corporation governed by this subchapter. (b) A public benefit corporation, at least bien…

Sec. 21.958. DERIVATIVE SUITS. (a) In this section, "shareholder" means: (1) shareholders of a public benefit corporation that own, individually or collectively, at least two percent of the corporation's outstanding shares; or (2) shareholders of a public benefit corporation the …

Sec. 21.959. NO EFFECT ON OTHER CORPORATIONS. Except as provided by Section 21.954, this subchapter does not apply to a corporation that is not a public benefit corporation. Added by Acts 2017, 85th Leg., R.S., Ch. 776 (H.B. 3488), Sec. 4, eff. September 1, 2017.

Sec. 22.001. DEFINITIONS. In this chapter: (1) "Board of directors" means the group of individuals vested with the management of the affairs of the corporation, regardless of the name used to designate the group. The term does not include the member or members of the corporation …

Sec. 22.002. MEETINGS BY REMOTE COMMUNICATIONS TECHNOLOGY. A meeting of the members of a corporation, the board of directors of a corporation, or any committee designated by the board of directors of a corporation may be held by means of a conference telephone or similar communic…

Sec. 22.051. GENERAL PURPOSES. A nonprofit corporation may be formed for any lawful purpose or purposes not expressly prohibited under this chapter or Chapter 2, including any purpose described by Section 2.002. Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.052. DENTAL HEALTH SERVICE CORPORATION. (a) A charitable corporation may be formed to operate a dental health service corporation that manages and coordinates the relationship between a dentist who contracts to perform dental services and a patient who will receive the se…

Sec. 22.053. DIVIDENDS PROHIBITED. Except as provided by Section 22.054, a dividend may not be paid to, and no part of the income of a corporation may be distributed to, the corporation's members, directors, or officers. Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006. A…

Sec. 22.054. AUTHORIZED BENEFITS AND DISTRIBUTIONS. A corporation may: (1) pay compensation in a reasonable amount to the members, directors, or officers of the corporation for services provided; (2) confer benefits on the corporation's members in conformity with the corporation'…

Sec. 22.055. POWER TO ASSIST EMPLOYEE OR OFFICER. (a) A corporation may lend money to or otherwise assist an employee or officer of the corporation, but not a director, if the loan or assistance may reasonably be expected to directly or indirectly benefit the corporation. (b) A l…

Sec. 22.056. HEALTH ORGANIZATION CORPORATION. (a) Doctors of medicine and osteopathy licensed by the Texas Medical Board, podiatrists licensed by the Texas Department of Licensing and Regulation, and chiropractors licensed by the Texas Board of Chiropractic Examiners may form a c…

Sec. 22.0561. CORPORATIONS FORMED BY PHYSICIANS AND PHYSICIAN ASSISTANTS. (a) Physicians licensed under Subtitle B, Title 3, Occupations Code, and physician assistants licensed under Chapter 204, Occupations Code, may form a corporation to perform a professional service that fall…

Sec. 22.101. INCORPORATION OF CERTAIN ORGANIZATIONS. A religious society, a charitable, benevolent, literary, or social association, or a church may incorporate as a corporation governed by this chapter with the consent of a majority of its members. Those members shall authorize …

Sec. 22.102. BYLAWS. (a) The initial bylaws of a corporation shall be adopted by the corporation's board of directors or, if the management of the corporation is vested in the corporation's members, by the members. (b) The bylaws may contain provisions for the regulation and mana…

Sec. 22.103. INCONSISTENCY BETWEEN CERTIFICATE OF FORMATION AND BYLAW. (a) A provision of a certificate of formation of a corporation that is inconsistent with a bylaw controls over the bylaw, except as provided by Subsection (b). (b) A change in the number of directors by amendm…

Sec. 22.104. ORGANIZATION MEETING. (a) After the certificate of formation is filed, the board of directors named in the certificate of formation of a corporation shall hold an organization meeting of the board, either in or out of this state, at the call of the organizers or a ma…

Sec. 22.105. PROCEDURES TO ADOPT AMENDMENT TO CERTIFICATE OF FORMATION BY MEMBERS HAVING VOTING RIGHTS. (a) Except as provided by Section 22.107(b), to amend the certificate of formation of a corporation with members having voting rights, the board of directors of the corporation…

Sec. 22.106. PROCEDURES TO ADOPT AMENDMENT TO CERTIFICATE OF FORMATION BY MANAGING MEMBERS. (a) To be approved, a proposed amendment to the certificate of formation of a corporation the management of the affairs of which is vested in the corporation's members under Section 22.202…

Sec. 22.107. PROCEDURES TO ADOPT AMENDMENT TO CERTIFICATE OF FORMATION BY BOARD OF DIRECTORS. (a) If a corporation has no members or has no members with voting rights, or in the case of an amendment under Subsection (b), an amendment to the corporation's certificate of formation …