Texas Business Organizations Code 21.710 – Effect of Termination of Close Corporation Status
Current as of: 2024 | Check for updates
|
Other versions
(a) A close corporation that terminates its status as a close corporation and becomes an ordinary corporation is subject to this chapter as if the corporation had not elected close corporation status under this subchapter.
(b) The effect of termination of close corporation status on a shareholders’ agreement is governed by § 21.724.
Terms Used In Texas Business Organizations Code 21.710
- Business: means a trade, occupation, profession, or other commercial activity. See Texas Business Organizations Code 1.002
- Close corporation: means a for-profit corporation that elects to be governed as a close corporation in accordance with Subchapter Texas Business Organizations Code 1.002
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Corporation: means an entity governed as a corporation under Title 2 or 7. See Texas Business Organizations Code 1.002
- Entity: means a domestic entity or foreign entity. See Texas Business Organizations Code 1.002
(c) When the termination of close corporation status takes effect, if the close corporation’s business and affairs have been managed by an entity other than a board of directors as provided by § 21.725, governance by a board of directors is instituted or reinstated:
(1) if provided by a shareholders’ agreement, in the manner stated in the agreement or by the persons named in the agreement to serve as the interim board of directors; or
(2) if each party to a shareholders’ agreement agrees to elect a board of directors at a shareholders’ meeting.