Texas Business Organizations Code 21.720 – Persons Bound by Shareholders’ Agreement
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(a) A shareholders’ agreement executed in accordance with § 21.715 is:
(1) considered to be an agreement among all of the shareholders of the close corporation; and
(2) binding on and enforceable against each shareholder of the close corporation, regardless of whether:
(A) a particular shareholder acquired shares in the close corporation by purchase, gift, bequest, or otherwise; or
(B) the shareholder had actual knowledge of the existence of the shareholders’ agreement at the time of acquiring shares.
(b) A transferee or assignee of shares of a close corporation in which there is a shareholders’ agreement is bound by the agreement for all purposes, regardless of whether the transferee or assignee executed or was aware of the agreement.
Terms Used In Texas Business Organizations Code 21.720
- Bequest: Property gifted by will.
- 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
- Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.