Termination of Close Corporation Status
Source:
Section 21.708 — Termination of Close Corporation Status, https://statutes.capitol.texas.gov/Docs/BO/htm/BO.21.htm#21.708 (accessed Jun. 5, 2024).
21.002
Definitions 21.051
No Property Right in Certificate of Formation 21.052
Procedures to Adopt Amendment to Certificate of Formation 21.053
Adoption of Amendment by Board of Directors 21.054
Adoption of Amendment by Shareholders 21.055
Notice of and Meeting to Consider Proposed Amendment 21.056
Restated Certificate of Formation 21.057
Bylaws 21.058
Dual Authority 21.059
Organization Meeting 21.101
Shareholders’ Agreement 21.102
Term of Agreement 21.103
Disclosure of Agreement 21.104
Effect of Shareholders’ Agreement 21.105
Right of Rescission 21.106
Agreement Limiting Authority of and Supplanting Board of Directors 21.107
Liability of Shareholder 21.108
Persons Acting in Place of Shareholders 21.109
Agreement Not Effective 21.110
Other Shareholder Agreements Permitted 21.151
Number of Authorized Shares 21.152
Classes and Series of Shares 21.153
Designations, Preferences, Limitations, and Rights of a Class or Series 21.154
Certain Optional Characteristics of Shares 21.155
Series of Shares Established by Board of Directors 21.156
Actions with Respect to Series of Shares 21.157
Issuance of Shares 21.158
Issuance of Shares Under Plan of Merger or Conversion 21.159
Types of Consideration for Shares 21.160
Determination of Consideration for Shares 21.161
Amount of Consideration for Issuance of Certain Shares 21.162
Value and Sufficiency of Consideration 21.163
Issuance and Disposition of Fractional Shares or Scrip 21.164
Rights of Holders of Fractional Shares or Scrip 21.165
Subscriptions 21.166
Preformation Subscription 21.167
Commitment to Purchase Shares 21.168
Stock Rights, Options, and Convertible Indebtedness 21.169
Terms and Conditions of Rights and Options 21.170
Consideration for Rights, Options, and Convertible Indebtedness 21.171
Outstanding or Treasury Shares 21.172
Expenses of Organization, Reorganization, and Financing of Corporation 21.173
Supplemental Required Records 21.201
Registered Holders as Owners 21.202
Definition of Shares 21.203
No Statutory Preemptive Right Unless Provided by Certificate of Formation 21.204
Statutory Preemptive Rights 21.205
Waiver of Preemptive Right 21.206
Limitation on Action to Enforce Preemptive Right 21.207
Disposition of Shares Having Preemptive Rights 21.208
Preemptive Right in Existing Corporation 21.209
Transfer of Shares and Other Securities 21.210
Restriction on Transfer of Shares and Other Securities 21.211
Valid Restrictions on Transfer 21.212
Bylaw or Agreement Restricting Transfer of Shares or Other Securities 21.213
Enforceability of Restriction on Transfer of Certain Securities 21.214
Joint Ownership of Shares 21.215
Liability for Designating Owner of Shares 21.216
Liability Regarding Joint Ownership of Shares 21.217
Liability of Assignee or Transferee 21.218
Examination of Records 21.219
Annual and Interim Statements of Corporation 21.220
Penalty for Failure to Prepare Voting List 21.221
Penalty for Failure to Provide Notice of Meeting 21.222
Penalty for Refusal to Permit Examination of Certain Records 21.223
Limitation of Liability for Obligations 21.224
Preemption of Liability 21.225
Exceptions to Limitations 21.226
Pledgees and Trust Administrators 21.251
Reduction of Stated Capital by Redemption or Purchase of Redeemable Shares 21.252
Cancellation of Treasury Shares 21.253
Procedures for Reduction of Stated Capital by Board of Directors 21.254
Restriction on Reduction of Stated Capital 21.301
Definitions 21.302
Authority for Distributions 21.303
Limitations on Distributions 21.304
Redemptions 21.305
Notice of Redemption 21.306
Deposit of Money for Redemption 21.307
Payment of Redeemed Shares 21.308
Priority of Distributions 21.309
Reserves, Designations, and Allocations from Surplus 21.310
Authority for Share Dividends 21.311
Limitations on Share Dividends 21.312
Value of Shares Issued as Share Dividends 21.313
Transfer of Surplus for Share Dividends 21.314
Determination of Solvency, Net Assets, Stated Capital, and Surplus 21.315
Date of Determination of Solvency, Net Assets, Stated Capital, and Surplus 21.316
Liability of Directors for Wrongful Distributions 21.317
Statute of Limitations on Action for Wrongful Distribution 21.318
Contribution from Certain Shareholders and Directors 21.351
Annual Meeting 21.352
Special Meetings 21.353
Notice of Meeting 21.354
Inspection of Voting List 21.355
Closing of Share Transfer Records 21.356
Record Date for Written Consent to Action 21.357
Record Date for Purpose of Shareholders’ Meeting 21.358
Quorum 21.359
Voting in Election of Directors 21.360
No Cumulative Voting Right Unless Authorized 21.361
Cumulative Voting in Election of Directors 21.362
Cumulative Voting Right in Certain Corporations 21.363
Voting on Matters Other than Election of Directors 21.364
Vote Required to Approve Fundamental Action 21.365
Changes in Vote Required for Certain Matters 21.366
Number of Votes Per Share 21.367
Voting in Person or by Proxy 21.368
Term of Proxy 21.369
Revocability of Proxy 21.370
Enforceability of Proxy 21.371
Procedures in Bylaws Relating to Proxies 21.372
Shareholder Meeting List 21.401
Management by Board of Directors 21.402
Board Member Eligibility Requirements 21.403
Number of Directors 21.404
Designation of Initial Board of Directors 21.405
Election of Board of Directors 21.406
Special Voting Rights of Directors 21.407
Term of Office 21.408
Special Terms of Office 21.409
Removal of Directors 21.410
Vacancy 21.411
Notice of Meeting 21.412
Waiver of Notice 21.413
Quorum 21.414
Dissent to or Abstention from Action 21.415
Action by Directors 21.416
Committees of Board of Directors 21.417
Election of Officers 21.418
Contracts or Transactions Involving Interested Directors and Officers 21.451
Definitions 21.452
Approval of Merger 21.453
Approval of Conversion 21.454
Approval of Exchange 21.455
Approval of Sale of All or Substantially All of Assets 21.456
General Procedure for Submission to Shareholders of Fundamental Business Transaction 21.457
General Vote Requirement for Approval of Fundamental Business Transaction 21.458
Class Voting Requirements for Certain Fundamental Business Transactions 21.459
No Shareholder Vote Requirement for Certain Fundamental Business Transactions 21.460
Rights of Dissent and Appraisal 21.461
Pledge, Mortgage, Deed of Trust, or Trust Indenture 21.462
Conveyance by Corporation 21.501
Approval of Voluntary Winding Up, Reinstatement, or Revocation of Voluntary Winding up 21.502
Certain Procedures Relating to Winding up 21.503
Meeting of Shareholders 21.504
Responsibility for Winding up 21.551
Definitions 21.552
Standing to Bring Proceeding 21.553
Demand 21.554
Determination by Directors or Independent Persons 21.555
Stay of Proceeding 21.556
Discovery 21.557
Tolling of Statute of Limitations 21.558
Dismissal of Derivative Proceeding 21.559
Allegations After Demand Rejected 21.560
Discontinuance or Settlement 21.561
Payment of Expenses 21.562
Application to Foreign Corporations 21.563
Closely Held Corporation 21.601
Definitions 21.602
Affiliated Shareholder 21.603
Beneficial Owner of Shares or Other Securities 21.604
Business Combination 21.605
Control 21.606
Three-year Moratorium on Certain Business Combinations 21.607
Application of Moratorium 21.608
Effect on Other Actions 21.609
Conflicting Provisions 21.610
Change in Voting Requirements 21.651
Definition 21.652
Establishing Class or Series of Shares 21.653
Required Statement Relating to Shares 21.654
Term of Office of Directors 21.655
Meetings of Shareholders 21.701
Definitions 21.702
Applicability of Subchapter 21.703
Formation of Close Corporation 21.704
Bylaws of Close Corporation 21.705
Adoption of Amendment for Close Corporation Status 21.706
Adoption of Close Corporation Status Through Merger, Exchange, or Conversion 21.707
Existing Close Corporation 21.708
Termination of Close Corporation Status 21.709
Statement Terminating Close Corporation Status 21.710
Effect of Termination of Close Corporation Status 21.711
Shareholders’ Meeting to Elect Directors 21.712
Term of Office of Directors 21.713
Management 21.714
Shareholders’ Agreement 21.715
Execution of Shareholders’ Agreement 21.716
Adoption of Amendment of Shareholders’ Agreement 21.717
Delivery of Shareholders’ Agreement 21.718
Statement of Operation as Close Corporation 21.719
Validity and Enforceability of Shareholders’ Agreement 21.720
Persons Bound by Shareholders’ Agreement 21.721
Delivery of Copy of Shareholders’ Agreement to Transferee 21.722
Effect of Required Statement on Share Certificate and Delivery of Shareholders’ Agreement 21.723
Party Not Bound by Shareholders’ Agreement on Cessation 21.724
Termination of Shareholders’ Agreement 21.725
Consequences of Management by Persons Other than Board of Directors 21.726
Shareholders Considered Directors 21.727
Liability of Shareholders 21.728
Mode and Effect of Taking Action by Shareholders and Others 21.729
Limitation of Shareholder’s Liability 21.730
Lack of Formalities 21.731
Other Agreements Among Shareholders Permitted 21.732
Close Corporation Share Certificates 21.751
Definitions 21.752
Proceedings Authorized 21.753
Notice 21.754
Proceeding Nonexclusive 21.755
Unavailability of Judicial Proceeding 21.756
Judicial Proceeding to Enforce Close Corporation Provision 21.757
Liquidation 21.758
Appointment of Provisional Director 21.759
Rights and Powers of Provisional Director 21.760
Compensation of Provisional Director 21.761
Appointment of Custodian 21.762
Powers and Duties of Custodian 21.763
Termination of Custodianship 21.801
Shares and Other Securities Are Personal Property 21.802
Penalties for Late Filing of Certain Instruments 21.901
Definitions 21.902
Ratification of Defective Corporate Act and Putative Shares 21.903
Ratification of Defective Corporate Act 21.904
Quorum and Voting Requirements for Adoption of Resolutions 21.905
Shareholder Approval of Ratified Defective Corporate Act Required 21.906
Notice Requirements for Ratified Defective Corporate Act Submitted for Shareholder Approval 21.907
Shareholder Meeting 21.908
Certificate of Validation 21.909
Adoption of Resolutions 21.910
Adoption of Resolutions 21.911
Notice to Shareholders Following Ratification of Defective Corporate Act 21.912
Valid Shares or Putative Shares 21.913
Ratification Procedures or Court Proceedings Concerning Validation Not Exclusive 21.914
Proceeding Regarding Validity of Defective Corporate Acts and Shares 21.915
Exclusive Jurisdiction 21.916
Service 21.917
Statute of Limitations 21.951
Law Applicable to Public Benefit Corporations 21.952
Definitions 21.953
Purpose of Public Benefit Corporation 21.954
Certain Amendments, Mergers, Exchanges, and Conversions 21.955
Stock Certificates 21.956
Duties of Directors 21.957
Periodic Statements 21.958
Derivative Suits 21.959
No Effect on Other Corporations 21.3521
Shareholder Meetings by Remote Communication 21.3531
Notice by Electronic Transmission 21.4091
Resignation of Directors
Definitions 21.051
No Property Right in Certificate of Formation 21.052
Procedures to Adopt Amendment to Certificate of Formation 21.053
Adoption of Amendment by Board of Directors 21.054
Adoption of Amendment by Shareholders 21.055
Notice of and Meeting to Consider Proposed Amendment 21.056
Restated Certificate of Formation 21.057
Bylaws 21.058
Dual Authority 21.059
Organization Meeting 21.101
Shareholders’ Agreement 21.102
Term of Agreement 21.103
Disclosure of Agreement 21.104
Effect of Shareholders’ Agreement 21.105
Right of Rescission 21.106
Agreement Limiting Authority of and Supplanting Board of Directors 21.107
Liability of Shareholder 21.108
Persons Acting in Place of Shareholders 21.109
Agreement Not Effective 21.110
Other Shareholder Agreements Permitted 21.151
Number of Authorized Shares 21.152
Classes and Series of Shares 21.153
Designations, Preferences, Limitations, and Rights of a Class or Series 21.154
Certain Optional Characteristics of Shares 21.155
Series of Shares Established by Board of Directors 21.156
Actions with Respect to Series of Shares 21.157
Issuance of Shares 21.158
Issuance of Shares Under Plan of Merger or Conversion 21.159
Types of Consideration for Shares 21.160
Determination of Consideration for Shares 21.161
Amount of Consideration for Issuance of Certain Shares 21.162
Value and Sufficiency of Consideration 21.163
Issuance and Disposition of Fractional Shares or Scrip 21.164
Rights of Holders of Fractional Shares or Scrip 21.165
Subscriptions 21.166
Preformation Subscription 21.167
Commitment to Purchase Shares 21.168
Stock Rights, Options, and Convertible Indebtedness 21.169
Terms and Conditions of Rights and Options 21.170
Consideration for Rights, Options, and Convertible Indebtedness 21.171
Outstanding or Treasury Shares 21.172
Expenses of Organization, Reorganization, and Financing of Corporation 21.173
Supplemental Required Records 21.201
Registered Holders as Owners 21.202
Definition of Shares 21.203
No Statutory Preemptive Right Unless Provided by Certificate of Formation 21.204
Statutory Preemptive Rights 21.205
Waiver of Preemptive Right 21.206
Limitation on Action to Enforce Preemptive Right 21.207
Disposition of Shares Having Preemptive Rights 21.208
Preemptive Right in Existing Corporation 21.209
Transfer of Shares and Other Securities 21.210
Restriction on Transfer of Shares and Other Securities 21.211
Valid Restrictions on Transfer 21.212
Bylaw or Agreement Restricting Transfer of Shares or Other Securities 21.213
Enforceability of Restriction on Transfer of Certain Securities 21.214
Joint Ownership of Shares 21.215
Liability for Designating Owner of Shares 21.216
Liability Regarding Joint Ownership of Shares 21.217
Liability of Assignee or Transferee 21.218
Examination of Records 21.219
Annual and Interim Statements of Corporation 21.220
Penalty for Failure to Prepare Voting List 21.221
Penalty for Failure to Provide Notice of Meeting 21.222
Penalty for Refusal to Permit Examination of Certain Records 21.223
Limitation of Liability for Obligations 21.224
Preemption of Liability 21.225
Exceptions to Limitations 21.226
Pledgees and Trust Administrators 21.251
Reduction of Stated Capital by Redemption or Purchase of Redeemable Shares 21.252
Cancellation of Treasury Shares 21.253
Procedures for Reduction of Stated Capital by Board of Directors 21.254
Restriction on Reduction of Stated Capital 21.301
Definitions 21.302
Authority for Distributions 21.303
Limitations on Distributions 21.304
Redemptions 21.305
Notice of Redemption 21.306
Deposit of Money for Redemption 21.307
Payment of Redeemed Shares 21.308
Priority of Distributions 21.309
Reserves, Designations, and Allocations from Surplus 21.310
Authority for Share Dividends 21.311
Limitations on Share Dividends 21.312
Value of Shares Issued as Share Dividends 21.313
Transfer of Surplus for Share Dividends 21.314
Determination of Solvency, Net Assets, Stated Capital, and Surplus 21.315
Date of Determination of Solvency, Net Assets, Stated Capital, and Surplus 21.316
Liability of Directors for Wrongful Distributions 21.317
Statute of Limitations on Action for Wrongful Distribution 21.318
Contribution from Certain Shareholders and Directors 21.351
Annual Meeting 21.352
Special Meetings 21.353
Notice of Meeting 21.354
Inspection of Voting List 21.355
Closing of Share Transfer Records 21.356
Record Date for Written Consent to Action 21.357
Record Date for Purpose of Shareholders’ Meeting 21.358
Quorum 21.359
Voting in Election of Directors 21.360
No Cumulative Voting Right Unless Authorized 21.361
Cumulative Voting in Election of Directors 21.362
Cumulative Voting Right in Certain Corporations 21.363
Voting on Matters Other than Election of Directors 21.364
Vote Required to Approve Fundamental Action 21.365
Changes in Vote Required for Certain Matters 21.366
Number of Votes Per Share 21.367
Voting in Person or by Proxy 21.368
Term of Proxy 21.369
Revocability of Proxy 21.370
Enforceability of Proxy 21.371
Procedures in Bylaws Relating to Proxies 21.372
Shareholder Meeting List 21.401
Management by Board of Directors 21.402
Board Member Eligibility Requirements 21.403
Number of Directors 21.404
Designation of Initial Board of Directors 21.405
Election of Board of Directors 21.406
Special Voting Rights of Directors 21.407
Term of Office 21.408
Special Terms of Office 21.409
Removal of Directors 21.410
Vacancy 21.411
Notice of Meeting 21.412
Waiver of Notice 21.413
Quorum 21.414
Dissent to or Abstention from Action 21.415
Action by Directors 21.416
Committees of Board of Directors 21.417
Election of Officers 21.418
Contracts or Transactions Involving Interested Directors and Officers 21.451
Definitions 21.452
Approval of Merger 21.453
Approval of Conversion 21.454
Approval of Exchange 21.455
Approval of Sale of All or Substantially All of Assets 21.456
General Procedure for Submission to Shareholders of Fundamental Business Transaction 21.457
General Vote Requirement for Approval of Fundamental Business Transaction 21.458
Class Voting Requirements for Certain Fundamental Business Transactions 21.459
No Shareholder Vote Requirement for Certain Fundamental Business Transactions 21.460
Rights of Dissent and Appraisal 21.461
Pledge, Mortgage, Deed of Trust, or Trust Indenture 21.462
Conveyance by Corporation 21.501
Approval of Voluntary Winding Up, Reinstatement, or Revocation of Voluntary Winding up 21.502
Certain Procedures Relating to Winding up 21.503
Meeting of Shareholders 21.504
Responsibility for Winding up 21.551
Definitions 21.552
Standing to Bring Proceeding 21.553
Demand 21.554
Determination by Directors or Independent Persons 21.555
Stay of Proceeding 21.556
Discovery 21.557
Tolling of Statute of Limitations 21.558
Dismissal of Derivative Proceeding 21.559
Allegations After Demand Rejected 21.560
Discontinuance or Settlement 21.561
Payment of Expenses 21.562
Application to Foreign Corporations 21.563
Closely Held Corporation 21.601
Definitions 21.602
Affiliated Shareholder 21.603
Beneficial Owner of Shares or Other Securities 21.604
Business Combination 21.605
Control 21.606
Three-year Moratorium on Certain Business Combinations 21.607
Application of Moratorium 21.608
Effect on Other Actions 21.609
Conflicting Provisions 21.610
Change in Voting Requirements 21.651
Definition 21.652
Establishing Class or Series of Shares 21.653
Required Statement Relating to Shares 21.654
Term of Office of Directors 21.655
Meetings of Shareholders 21.701
Definitions 21.702
Applicability of Subchapter 21.703
Formation of Close Corporation 21.704
Bylaws of Close Corporation 21.705
Adoption of Amendment for Close Corporation Status 21.706
Adoption of Close Corporation Status Through Merger, Exchange, or Conversion 21.707
Existing Close Corporation 21.708
Termination of Close Corporation Status 21.709
Statement Terminating Close Corporation Status 21.710
Effect of Termination of Close Corporation Status 21.711
Shareholders’ Meeting to Elect Directors 21.712
Term of Office of Directors 21.713
Management 21.714
Shareholders’ Agreement 21.715
Execution of Shareholders’ Agreement 21.716
Adoption of Amendment of Shareholders’ Agreement 21.717
Delivery of Shareholders’ Agreement 21.718
Statement of Operation as Close Corporation 21.719
Validity and Enforceability of Shareholders’ Agreement 21.720
Persons Bound by Shareholders’ Agreement 21.721
Delivery of Copy of Shareholders’ Agreement to Transferee 21.722
Effect of Required Statement on Share Certificate and Delivery of Shareholders’ Agreement 21.723
Party Not Bound by Shareholders’ Agreement on Cessation 21.724
Termination of Shareholders’ Agreement 21.725
Consequences of Management by Persons Other than Board of Directors 21.726
Shareholders Considered Directors 21.727
Liability of Shareholders 21.728
Mode and Effect of Taking Action by Shareholders and Others 21.729
Limitation of Shareholder’s Liability 21.730
Lack of Formalities 21.731
Other Agreements Among Shareholders Permitted 21.732
Close Corporation Share Certificates 21.751
Definitions 21.752
Proceedings Authorized 21.753
Notice 21.754
Proceeding Nonexclusive 21.755
Unavailability of Judicial Proceeding 21.756
Judicial Proceeding to Enforce Close Corporation Provision 21.757
Liquidation 21.758
Appointment of Provisional Director 21.759
Rights and Powers of Provisional Director 21.760
Compensation of Provisional Director 21.761
Appointment of Custodian 21.762
Powers and Duties of Custodian 21.763
Termination of Custodianship 21.801
Shares and Other Securities Are Personal Property 21.802
Penalties for Late Filing of Certain Instruments 21.901
Definitions 21.902
Ratification of Defective Corporate Act and Putative Shares 21.903
Ratification of Defective Corporate Act 21.904
Quorum and Voting Requirements for Adoption of Resolutions 21.905
Shareholder Approval of Ratified Defective Corporate Act Required 21.906
Notice Requirements for Ratified Defective Corporate Act Submitted for Shareholder Approval 21.907
Shareholder Meeting 21.908
Certificate of Validation 21.909
Adoption of Resolutions 21.910
Adoption of Resolutions 21.911
Notice to Shareholders Following Ratification of Defective Corporate Act 21.912
Valid Shares or Putative Shares 21.913
Ratification Procedures or Court Proceedings Concerning Validation Not Exclusive 21.914
Proceeding Regarding Validity of Defective Corporate Acts and Shares 21.915
Exclusive Jurisdiction 21.916
Service 21.917
Statute of Limitations 21.951
Law Applicable to Public Benefit Corporations 21.952
Definitions 21.953
Purpose of Public Benefit Corporation 21.954
Certain Amendments, Mergers, Exchanges, and Conversions 21.955
Stock Certificates 21.956
Duties of Directors 21.957
Periodic Statements 21.958
Derivative Suits 21.959
No Effect on Other Corporations 21.3521
Shareholder Meetings by Remote Communication 21.3531
Notice by Electronic Transmission 21.4091
Resignation of Directors
