(a) A purchaser of shares who does not have knowledge at the time of purchase of the existence of a shareholders’ agreement authorized by this subchapter is entitled to rescind the purchase.
(b) A purchaser is considered to have knowledge of the existence of the shareholders’ agreement for purposes of this section if:
(1) the existence of the agreement is noted on the certificate or information statement for the shares as required by § 21.103; and
(2) with respect to shares that are not represented by a certificate, the information statement noting existence of the agreement is delivered to the purchaser not later than the time the shares are purchased.

Terms Used In Texas Business Organizations Code 21.105

  • Right of rescission: Right to cancel, within three business days, a contract that uses the home of a person as collateral, except in the case of a first mortgage loan. There is no fee to the borrower, who receives a full refund of all fees paid. The right of rescission is guaranteed by the Truth in Lending Act (TILA). Source: OCC

(c) An action to enforce the right of rescission authorized by this section must be commenced not later than the earlier of:
(1) the 90th day after the date the existence of the shareholder agreement is discovered; or
(2) the second anniversary of the purchase date of the shares.

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