Sections
Subchapter A Definitions and Purpose 1.001 – 1.009
Subchapter B Code Construction 1.051 – 1.054
Subchapter C Determination of Applicable Law 1.101 – 1.106

Terms Used In Texas Business Organizations Code Chapter 1

  • Affiliate: means a person who controls, is controlled by, or is under common control with another person. See Texas Business Organizations Code 1.002
  • Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
  • Answer: The formal written statement by a defendant responding to a civil complaint and setting forth the grounds for defense.
  • Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
  • Appellate: About appeals; an appellate court has the power to review the judgement of another lower court or tribunal.
  • Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
  • Artificial swimming lagoon: means an artificial body of water used for recreational purposes with more than 20,000 square feet of surface area, an artificial liner, and a method of disinfectant. See Texas Health and Safety Code 1.005
  • Associate: when used to indicate a relationship with a person, means:
    (A) a domestic or foreign entity or organization for which the person:
    (i) is an officer or governing person; or
    (ii) beneficially owns, directly or indirectly, either individually or through an affiliate, 10 percent or more of a class of voting ownership interests or similar securities of the entity or organization;
    (B) a trust or estate in which the person has a substantial beneficial interest or for which the person serves as trustee or in a similar fiduciary capacity;
    (C) the person's spouse or a relative of the person related by consanguinity or affinity who resides with the person; or
    (D) a governing person or an affiliate or officer of the person. See Texas Business Organizations Code 1.002
  • Association: means an entity governed as an association under Title 6 or 7. See Texas Business Organizations Code 1.002
  • Assumed name: means a name adopted for use by a person. See Texas Business Organizations Code 1.002
  • Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • Bequest: Property gifted by will.
  • Business: means a trade, occupation, profession, or other commercial activity. See Texas Business Organizations Code 1.002
  • Certificate of formation: means :
    (A) the document required to be filed with the filing officer under Chapter 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 O, Chapter Texas Business Organizations Code 1.002
  • Commissioner: means the commissioner of agriculture. See Texas Agriculture Code 1.003
  • Common law: The legal system that originated in England and is now in use in the United States. It is based on judicial decisions rather than legislative action.
  • Continuance: Putting off of a hearing ot trial until a later time.
  • Contribution: means a tangible or intangible benefit that a person transfers to an entity in consideration for an ownership interest in the entity or otherwise in the person's capacity as an owner or a member. See Texas Business Organizations Code 1.002
  • Conversion: means :
    (A) the continuance of a domestic entity as a non-code organization of any type;
    (B) the continuance of a non-code organization as a domestic entity of any type;
    (C) the continuance of a domestic entity of one type as a domestic entity of another type;
    (D) the continuance of a domestic entity of one type as a foreign entity of the same type that may be treated as a domestication, continuance, or transfer transaction under the laws of the jurisdiction of formation of the foreign entity; or
    (E) the continuance of a foreign entity of one type as a domestic entity of the same type that may be treated as a domestication, continuance, or transfer transaction under the laws of the jurisdiction of formation of the foreign entity. See Texas Business Organizations Code 1.002
  • cooperative association: means an association governed as a cooperative association under Chapter Texas Business Organizations Code 1.002
  • Corporation: means an entity governed as a corporation under Title 2 or 7. See Texas Business Organizations Code 1.002
  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
  • Defendant: In a civil suit, the person complained against; in a criminal case, the person accused of the crime.
  • Department: means the Department of Agriculture. See Texas Agriculture Code 1.003
  • Discovery: Lawyers' examination, before trial, of facts and documents in possession of the opponents to help the lawyers prepare for trial.
  • Docket: A log containing brief entries of court proceedings.
  • Domestic: means , with respect to an entity, that the entity is formed under this code or the entity's internal affairs are governed by this code. See Texas Business Organizations Code 1.002
  • Domestic entity: means an organization formed under or the internal affairs of which are governed by this code. See Texas Business Organizations Code 1.002
  • Donor: The person who makes a gift.
  • Effects: includes all personal property and all interest in that property. See Texas Government Code 312.011
  • Entity: means a domestic entity or foreign entity. See Texas Business Organizations Code 1.002
  • Escheat: Reversion of real or personal property to the state when 1) a person dies without leaving a will and has no heirs, or 2) when the property (such as a bank account) has been inactive for a certain period of time. Source: OCC
  • Escrow: Money given to a third party to be held for payment until certain conditions are met.
  • Executor: A male person named in a will to carry out the decedent
  • Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
  • Federal Deposit Insurance Corporation: A government corporation that insures the deposits of all national and state banks that are members of the Federal Reserve System. Source: OCC
  • Fee simple: Absolute title to property with no limitations or restrictions regarding the person who may inherit it.
  • Fiduciary: A trustee, executor, or administrator.
  • Filing entity: means a domestic entity that is a corporation, limited partnership, limited liability company, professional association, cooperative, or real estate investment trust. See Texas Business Organizations Code 1.002
  • Filing officer: means :
    (A) with respect to an entity other than a domestic real estate investment trust, the secretary of state; or
    (B) with respect to a domestic real estate investment trust, the county clerk of the county in which the real estate investment trust's principal office is located in this state. See Texas Business Organizations Code 1.002
  • Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
  • For-profit corporation: means a corporation governed as a for-profit corporation under Chapter Texas Business Organizations Code 1.002
  • Foreign: means , with respect to an entity, that the entity is formed under, and the entity's internal affairs are governed by, the laws of a jurisdiction other than this state. See Texas Business Organizations Code 1.002
  • Foreign entity: means an organization formed under, and the internal affairs of which are governed by, the laws of a jurisdiction other than this state. See Texas Business Organizations Code 1.002
  • Foreign filing entity: means a foreign entity, other than a foreign limited liability partnership, that registers or is required to register as a foreign entity under Chapter Texas Business Organizations Code 1.002
  • Foreign governmental authority: means a governmental official, agency, or instrumentality of a jurisdiction other than this state. See Texas Business Organizations Code 1.002
  • General partner: means :
    (A) each partner in a general partnership; or
    (B) a person who is admitted to a limited partnership as a general partner in accordance with the governing documents of the limited partnership. See Texas Business Organizations Code 1.002
  • General partnership: means a partnership governed as a general partnership under Chapter Texas Business Organizations Code 1.002
  • Governing authority: means a person or group of persons who are entitled to manage and direct the affairs of an entity under this code and the governing documents of the entity, except that if the governing documents of the entity or this code divide the authority to manage and direct the affairs of the entity among different persons or groups of persons according to different matters, "governing authority" means the person or group of persons entitled to manage and direct the affairs of the entity with respect to a matter under the governing documents of the entity or this code. See Texas Business Organizations Code 1.002
  • Governing documents: means :
    (A) in the case of a domestic entity:
    (i) the certificate of formation for a domestic filing entity or the document or agreement under which a domestic nonfiling entity is formed; and
    (ii) the other documents or agreements adopted by the entity under this code to govern the formation or the internal affairs of the entity; or
    (B) in the case of a foreign entity, the instruments, documents, or agreements adopted under the law of its jurisdiction of formation to govern the formation or the internal affairs of the entity. See Texas Business Organizations Code 1.002
  • Governing person: means a person serving as part of the governing authority of an entity. See Texas Business Organizations Code 1.002
  • holder of shares: means :
    (A) the person in whose name shares issued by a for-profit corporation, professional corporation, or real estate investment trust are registered in the share transfer records maintained by or on behalf of the for-profit corporation, professional corporation, or real estate investment trust; or
    (B) the beneficial owner of shares issued by a for-profit corporation, whose shares are held in a voting trust or by a nominee on the beneficial owner's behalf, to the extent of the rights granted by a nominee statement on file with the for-profit corporation in accordance with Sections Texas Business Organizations Code 1.002
  • Individual: means a natural person. See Texas Business Organizations Code 1.002
  • Injunction: An order of the court prohibiting (or compelling) the performance of a specific act to prevent irreparable damage or injury.
  • Insolvency: means the inability of a person to pay the person's debts as they become due in the usual course of business or affairs. See Texas Business Organizations Code 1.002
  • Insolvent: means a person who is unable to pay the person's debts as they become due in the usual course of business or affairs. See Texas Business Organizations Code 1.002
  • Intangible property: Property that has no intrinsic value, but is merely the evidence of value such as stock certificates, bonds, and promissory notes.
  • Interest exchange: means the acquisition of an ownership or membership interest in a domestic entity as provided by Subchapter B, Chapter Texas Business Organizations Code 1.002
  • Internal Revenue Code: means the Internal Revenue Code of 1986, as amended. See Texas Business Organizations Code 1.002
  • Jurisdiction of formation: means :
    (A) in the case of a domestic filing entity, this state;
    (B) in the case of a foreign entity for which a certificate of formation or similar organizational instrument is filed in connection with its formation, the jurisdiction in which the entity's certificate of formation or similar organizational instrument is filed; or
    (C) in the case of a domestic nonfiling entity or a foreign entity for which a certificate of formation or similar organizational instrument is not filed in connection with its formation:
    (i) the jurisdiction the laws of which are chosen in the entity's governing documents to govern its internal affairs if that jurisdiction bears a reasonable relation to the owners or members or to the entity's business and affairs under the principles of this state that otherwise would apply to a contract among the owners or members; or
    (ii) if Subparagraph (i) does not apply, the jurisdiction in which the entity has its chief executive office. 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
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • License: means a license, certificate of registration, or other legal authorization. See Texas Business Organizations Code 1.002
  • Limited liability company: means an entity governed as a limited liability company under Title 3 or 7. See Texas Business Organizations Code 1.002
  • Limited liability limited partnership: means a partnership governed as a limited liability partnership and a limited partnership under Title 4. See Texas Business Organizations Code 1.002
  • Limited liability partnership: means a partnership governed as a limited liability partnership under Title 4. See Texas Business Organizations Code 1.002
  • Limited partner: means a person who has been admitted to a limited partnership as a limited partner as provided by:
    (A) in the case of a domestic limited partnership, Chapter Texas Business Organizations Code 1.002
  • Limited partnership: means a partnership that is governed as a limited partnership under Title 4 and that has one or more general partners and one or more limited partners. See Texas Business Organizations Code 1.002
  • Livestock: means cattle, horses, mules, asses, sheep, goats, llamas, alpacas, exotic livestock, including elk and elk hybrids, and hogs, unless otherwise defined. See Texas Agriculture Code 1.003
  • Manager: means a person designated as a manager of a limited liability company that is not managed by members of the company. See Texas Business Organizations Code 1.002
  • Managerial official: means an officer or a governing person. See Texas Business Organizations Code 1.002
  • Member: means :
    (A) in the case of a limited liability company, a person who is a member or has been admitted as a member in the limited liability company under its governing documents;
    (B) in the case of a nonprofit corporation, a person who has membership rights in the nonprofit corporation under its governing documents;
    (C) in the case of a cooperative association, a member of a nonshare or share association;
    (D) in the case of a nonprofit association, a person who has membership rights in the nonprofit association under its governing documents; or
    (E) in the case of a professional association, a person who has membership rights in the professional association under its governing documents. See Texas Business Organizations Code 1.002
  • Membership interest: means a member's interest in an entity. See Texas Business Organizations Code 1.002
  • Merger: means :
    (A) the division of a domestic entity into two or more new domestic entities or other organizations or into a surviving domestic entity and one or more new domestic or foreign entities or non-code organizations; or
    (B) the combination of one or more domestic entities with one or more domestic entities or non-code organizations resulting in:
    (i) one or more surviving domestic entities or non-code organizations;
    (ii) the creation of one or more new domestic entities or non-code organizations; or
    (iii) one or more surviving domestic entities or non-code organizations and the creation of one or more new domestic entities or non-code organizations. See Texas Business Organizations Code 1.002
  • most recent federal census: means the United States decennial census immediately preceding the action in question. See Texas Government Code 312.011
  • National securities exchange: means an exchange registered as a national securities exchange under Section 6, Securities Exchange Act of 1934 (15 U. See Texas Business Organizations Code 1.002
  • Non-code organization: means an organization other than a domestic entity. See Texas Business Organizations Code 1.002
  • Non-United States entity: means a foreign entity formed under, and the internal affairs of which are governed by, the laws of a non-United States jurisdiction. See Texas Business Organizations Code 1.002
  • Non-United States jurisdiction: means a foreign country or other foreign jurisdiction that is not the United States or a state of the United States. See Texas Business Organizations Code 1.002
  • Nonfiling entity: means a domestic entity that is not a filing entity. See Texas Business Organizations Code 1.002
  • Nonprofit association: means an association governed as a nonprofit association under Chapter Texas Business Organizations Code 1.002
  • Nonprofit corporation: means a corporation governed as a nonprofit corporation under Chapter Texas Business Organizations Code 1.002
  • Nonprofit entity: means an entity that is a nonprofit corporation, nonprofit association, or other entity that is organized solely for one or more of the purposes specified by Section Texas Business Organizations Code 1.002
  • Oath: includes affirmation. See Texas Government Code 311.005
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Officer: means an individual elected, appointed, or designated as an officer of an entity by the entity's governing authority or under the entity's governing documents. See Texas Business Organizations Code 1.002
  • Organization: means a corporation, limited or general partnership, limited liability company, business trust, real estate investment trust, joint venture, joint stock company, cooperative, association, bank, insurance company, credit union, savings and loan association, or other organization, regardless of whether the organization is for-profit, nonprofit, domestic, or foreign. See Texas Business Organizations Code 1.002
  • Oversight: Committee review of the activities of a Federal agency or program.
  • Owner liability: means personal liability for a liability or other obligation of an organization that is imposed on a person:
    (A) by statute solely because of the person's status as an owner or member of the organization; or
    (B) by a governing document of an organization under a provision of this code or the law of the organization's jurisdiction of formation that authorizes the governing document to make one or more specified owners or members of the organization liable in their capacity as owners or members for all or specified liabilities or other obligations of the organization. See Texas Business Organizations Code 1.002
  • Ownership interest: means an owner's interest in an entity. See Texas Business Organizations Code 1.002
  • Parent: means an organization that, directly or indirectly through or with one or more of its subsidiaries:
    (A) owns at least 50 percent of the outstanding ownership or membership interests of another organization; or
    (B) possesses at least 50 percent of the voting power of the owners or members of another organization. See Texas Business Organizations Code 1.002
  • Partner: means a limited partner or general partner. See Texas Business Organizations Code 1.002
  • Partnership: means an entity governed as a partnership under Title 4. See Texas Business Organizations Code 1.002
  • Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
  • Partnership interest: means a partner's interest in a partnership. See Texas Business Organizations Code 1.002
  • Party to the merger: means a domestic entity or non-code organization that under a plan of merger is divided or combined by a merger. 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 series of a domestic limited liability company or foreign entity. See Texas Business Organizations Code 1.002
  • Personal property: All property that is not real property.
  • Plaintiff: The person who files the complaint in a civil lawsuit.
  • Plan of conversion: means a document that conforms with the requirements of Section Texas Business Organizations Code 1.002
  • Plan of exchange: means a document that conforms with the requirements of Section Texas Business Organizations Code 1.002
  • Plan of merger: means a document that conforms with the requirements of Sections Texas Business Organizations Code 1.002
  • Plea: In a criminal case, the defendant's statement pleading "guilty" or "not guilty" in answer to the charges, a declaration made in open court.
  • Pleadings: Written statements of the parties in a civil case of their positions. In the federal courts, the principal pleadings are the complaint and the answer.
  • Precedent: A court decision in an earlier case with facts and law similar to a dispute currently before a court. Precedent will ordinarily govern the decision of a later similar case, unless a party can show that it was wrongly decided or that it differed in some significant way.
  • President: means the:
    (A) individual designated as president of an entity under the entity's governing documents; or
    (B) officer or committee of persons authorized to perform the functions of the principal executive officer of an entity without regard to the designated name of the officer or committee. See Texas Business Organizations Code 1.002
  • Professional association: has the meaning assigned by Section Texas Business Organizations Code 1.002
  • Professional corporation: has the meaning assigned by Section Texas Business Organizations Code 1.002
  • Professional limited liability company: has the meaning assigned by Section Texas Business Organizations Code 1.002
  • Property: includes tangible and intangible property and an interest in that property. See Texas Business Organizations Code 1.002
  • Public swimming pool: means an artificial body of water, including a spa, maintained expressly for public recreational purposes, swimming and similar aquatic sports, or therapeutic purposes. See Texas Health and Safety Code 1.005
  • Real estate investment trust: means an entity governed as a real estate investment trust under Title 5. See Texas Business Organizations Code 1.002
  • Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
  • Secretary: means the:
    (A) individual designated as secretary of an entity under the entity's governing documents; or
    (B) officer or committee of persons authorized to perform the functions of secretary of an entity without regard to the designated name of the officer or committee. See Texas Business Organizations Code 1.002
  • Share: means a unit into which the ownership interest in a for-profit corporation, professional corporation, real estate investment trust, or professional association is divided, regardless of whether the share is certificated or uncertificated. See Texas Business Organizations Code 1.002
  • Signature: means any symbol executed or adopted by a person with present intention to authenticate a writing. See Texas Business Organizations Code 1.002
  • Social purposes: means one or more purposes of a for-profit corporation that are specified in the corporation's certificate of formation and consist of promoting one or more positive impacts on society or the environment or of minimizing one or more adverse impacts of the corporation's activities on society or the environment. See Texas Business Organizations Code 1.002
  • Statute: A law passed by a legislature.
  • Subscriber: means a person who agrees with or makes an offer to an entity to purchase by subscription an ownership interest in the entity. See Texas Business Organizations Code 1.002
  • Subscription: means an agreement between a subscriber and an entity, or a written offer made by a subscriber to an entity before or after the entity's formation, in which the subscriber agrees or offers to purchase a specified ownership interest in the entity. See Texas Business Organizations Code 1.002
  • Subsidiary: means an organization for which another organization, either directly or indirectly through or with one or more of its other subsidiaries:
    (A) owns at least 50 percent of the outstanding ownership or membership interests of the organization; or
    (B) possesses at least 50 percent of the voting power of the owners or members of the organization. See Texas Business Organizations Code 1.002
  • Succeeding: means immediately following. See Texas Government Code 312.011
  • sworn: includes affirm or affirmed. See Texas Government Code 312.011
  • Temporary restraining order: Prohibits a person from an action that is likely to cause irreparable harm. This differs from an injunction in that it may be granted immediately, without notice to the opposing party, and without a hearing. It is intended to last only until a hearing can be held.
  • Testify: Answer questions in court.
  • Testimony: Evidence presented orally by witnesses during trials or before grand juries.
  • Tort: A civil wrong or breach of a duty to another person, as outlined by law. A very common tort is negligent operation of a motor vehicle that results in property damage and personal injury in an automobile accident.
  • Treasurer: means the:
    (A) individual designated as treasurer of an entity under the entity's governing documents; or
    (B) officer or committee of persons authorized to perform the functions of treasurer of an entity without regard to the designated name of the officer or committee. See Texas Business Organizations Code 1.002
  • Trial: A hearing that takes place when the defendant pleads "not guilty" and witnesses are required to come to court to give evidence.
  • Trustee: A person or institution holding and administering property in trust.
  • Uncertificated ownership interest: means an ownership interest in a domestic entity that is not represented by an instrument and is transferred by:
    (A) amendment of the governing documents of the entity; or
    (B) registration on books maintained by or on behalf of the entity for the purpose of registering transfers of ownership interests. See Texas Business Organizations Code 1.002
  • Vice president: means the:
    (A) individual designated as vice president of an entity under the governing documents of the entity; or
    (B) officer or committee of persons authorized to perform the functions of the president of the entity on the death, absence, or resignation of the president or on the inability of the president to perform the functions of office without regard to the designated name of the officer or committee. See Texas Business Organizations Code 1.002
  • Week: means seven consecutive days. See Texas Government Code 311.005
  • Writ: A formal written command, issued from the court, requiring the performance of a specific act.
  • written: means an expression of words, letters, characters, numbers, symbols, figures, or other textual information that is inscribed on a tangible medium or that is stored in an electronic or other medium that is retrievable in a perceivable form. See Texas Business Organizations Code 1.002
  • Year: means 12 consecutive months. See Texas Government Code 311.005