Tex. Bus. Orgs. Code Section 21.002
Definitions

In this chapter:

(1)

“Authorized share” means a share of any class the corporation is authorized to issue.

(2)

“Board of directors” includes each person who is authorized to perform the functions of the board of directors under a shareholders’ agreement as authorized by this chapter.

(3)

“Cancel,” with respect to an authorized share of a corporation, means the restoration of an issued share to the status of an authorized but unissued share.

(4)

“Consuming assets corporation” means a corporation that:

(A)

is engaged in the business of exploiting assets subject to depletion or amortization;

(B)

states in its certificate of formation that it is a consuming assets corporation;

(C)

includes the phrase “a consuming assets corporation” as part of its official corporate name and gives the phrase equal prominence with the rest of the corporate name on the financial statements and certificates of ownership of the corporation; and

(D)

includes in each of the certificates of ownership of the corporation the sentence, “This corporation is permitted by law to pay dividends out of reserves that may impair its stated capital.”

(5)

“Corporation” or “domestic corporation” means a domestic for-profit corporation subject to this chapter.

(6)

(A) “Distribution” means a transfer of property, including cash, or issuance of debt, by a corporation to its shareholders in the form of:

(i)

a dividend on any class or series of its outstanding shares;

(ii)

a purchase or redemption, directly or indirectly, of any of its own shares; or

(iii)

a payment by the corporation in liquidation of all or a portion of its assets.

(B)

The term does not include:

(i)

a split-up or division of the issued shares of a class of a corporation into a larger number of shares within the same class that does not increase the stated capital of the corporation; or

(ii)

a transfer of the corporation’s own shares or rights to acquire its own shares.

(7)

“Foreign corporation” means a for-profit corporation formed under the laws of a jurisdiction other than this state.

(8)

“Investment Company Act” means the Investment Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.), as amended.

(9)

“Net assets” means the amount by which the total assets of a corporation exceed the total debts of the corporation.

(10)

“Share dividend” means a dividend by a corporation that is payable in authorized but unissued shares or treasury shares of the corporation. The term does not include:

(A)

an amendment to the corporation’s certificate of formation to change the shares of a class or series, with or without par value, into the same or a different number of shares of the same or a different class or series, with or without par value; or

(B)

a split-up or division of the issued shares of a class of a corporation into a larger number of shares within the same class that does not increase the stated capital of the corporation.

(10-a)

“Share transfer records” means one or more records maintained by or on behalf of a corporation in accordance with Section 3.151 (Books and Records for All Filing Entities) in which the names of all of the corporation’s shareholders of record, the address of and number of shares registered in the name of each shareholder of record, and all issuances and transfers of shares of the corporation are recorded.

(11)

“Stated capital” means the sum of:

(A)

the par value of all shares of the corporation with par value that have been issued;

(B)

the consideration, as expressed in terms of United States dollars, determined by the corporation in the manner provided by Section 21.160 (Determination of Consideration for Shares) for all shares of the corporation without par value that have been issued, except that part, but not all, of the consideration that:

(i)

has been actually received; and

(ii)

the board, by resolution adopted not later than the 60th day after the date of issuance of those shares, has allocated to surplus; and

(C)

an amount not included in Paragraphs (A) and (B) that has been transferred to stated capital of the corporation, on the payment of a share dividend or on adoption by the board of directors of a resolution directing that all or part of surplus be transferred to stated capital, minus each reduction made as permitted by law.

(12)

“Surplus” means the amount by which the net assets of a corporation exceed the stated capital of the corporation.

(13)

“Treasury shares” means shares of a corporation that have been issued, and subsequently acquired by the corporation, that belong to the corporation and that have not been canceled. The term does not include shares held by a corporation in a fiduciary capacity, whether directly or through a trust or similar arrangement.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Amended by:

Acts 2019, 86th Leg., R.S., Ch. 665 (S.B. 1971), Sec. 5, eff. September 1, 2019.

Source: Section 21.002 — Definitions, https://statutes.capitol.texas.gov/Docs/BO/htm/BO.21.htm#21.002 (accessed Apr. 13, 2024).

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Tex. Bus. Orgs. Code Section 21.002 Definitions

(1)

(2)

(3)

(4)

(A)

(B)

(C)

(D)

(5)

(6)

(i)

(ii)

(iii)

(B)

(i)

(ii)

(7)

(8)

(9)

(10)

(A)

(B)

(10-a)

(11)

(A)

(B)

(i)

(ii)

(C)

(12)

(13)

Tex. Bus. Orgs. Code Section 21.002
Definitions