Texas Business Organizations Code 21.727 – Liability of Shareholders
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Terms Used In Texas Business Organizations Code 21.727
- 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
- Director: means an individual who serves on the board of directors of a foreign or domestic corporation. See Texas Business Organizations Code 1.002
- Law: means , unless the context requires otherwise, both statutory and common law. 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
The shareholders of a close corporation described by § 21.725 are subject to any liability imposed on a director of a corporation by this chapter or other law for a managerial act of or omission made by the shareholders or any other person empowered to manage the business and affairs of the close corporation under a shareholders’ agreement and relating to the business and affairs of the close corporation, if the action is required by law to be undertaken by the board of directors.