Texas Business Organizations Code 21.719 – Validity and Enforceability of Shareholders’ Agreement
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(a) A shareholders’ agreement executed in accordance with § 21.715 is valid and enforceable notwithstanding:
(1) the elimination of a board of directors;
(2) any restriction imposed on the discretion or powers of the board of directors or other person empowered to manage the close corporation; and
(3) that the effect of the shareholders’ agreement is to treat the business and affairs of the close corporation as if the close corporation were a partnership or in a manner that would otherwise be appropriate only among partners.
(b) A close corporation, a shareholder of the close corporation, or a party to a shareholders’ agreement may initiate a proceeding to enforce the shareholders’ agreement in accordance with § 21.756.
Terms Used In Texas Business Organizations Code 21.719
- 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
- Person: means an individual or a corporation, partnership, limited liability company, business trust, trust, association, or other organization, estate, government or governmental subdivision or agency, or other legal entity, or a protected series or registered series of a domestic limited liability company or foreign entity. See Texas Business Organizations Code 1.002