Terms Used In Texas Business Organizations Code Chapter 21 - For-Profit Corporations

• Adjourn: A motion to adjourn a legislative chamber or a committee, if passed, ends that day's session.
• Advice and consent: Under the Constitution, presidential nominations for executive and judicial posts take effect only when confirmed by the Senate, and international treaties become effective only when the Senate approves them by a two-thirds vote.
• Affiliate: means a person who controls, is controlled by, or is under common control with another person. See Texas Business Organizations Code 1.002
• Affirmed: In the practice of the appellate courts, the decree or order is declared valid and will stand as rendered in the lower court.
• Amortization: Paying off a loan by regular installments.
• Annual percentage rate: The cost of credit at a yearly rate. It is calculated in a standard way, taking the average compound interest rate over the term of the loan so borrowers can compare loans. Lenders are required by law to disclose a card account's APR. ^{Source: FDIC}
• Appraisal: A determination of property value.
• 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
• 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
• Baseline: Projection of the receipts, outlays, and other budget amounts that would ensue in the future without any change in existing policy. Baseline projections are used to gauge the extent to which proposed legislation, if enacted into law, would alter current spending and revenue levels.
• 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 3 to form a filing entity; and
  (B) if appropriate, a restated certificate of formation and all amendments of an original or restated certificate of formation. See Texas Business Organizations Code 1.002
• Charge to the jury: The judge's instructions to the jury concerning the law that applies to the facts of the case on trial.
• Charitable organization: means :
  (1) a nonprofit corporation, trust, community chest, fund, foundation, or other entity that is:
  (A) exempt from federal income tax under Section 501(a), Internal Revenue Code of 1986, by being described by Section 501(c)(3) of that code; and
  (B) organized and operated exclusively for:
  (i) religious, charitable, scientific, educational, or literary purposes;
  (ii) testing for public safety;
  (iii) preventing cruelty to children or animals; or
  (iv) promoting amateur sports competition; or
  (2) any other entity that is organized and operated exclusively for the purposes listed in Section 501(c)(3), Internal Revenue Code of 1986. See Texas Estates Code 22.003
• Charity: An agency, institution, or organization in existence and operating for the benefit of an indefinite number of persons and conducted for educational, religious, scientific, medical, or other beneficent purposes.
• Child: includes an adopted child, regardless of whether the adoption occurred through:
  (1) an existing or former statutory procedure; or
  (2) an equitable adoption or acts of estoppel. See Texas Estates Code 22.004
• Circumstantial evidence: All evidence except eyewitness testimony.
• 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
• Commissioner: means the commissioner of state health services. See Texas Health and Safety Code 486.001
• Concurrent resolution: A legislative measure, designated "S. Con. Res." and numbered consecutively upon introduction, generally employed to address the sentiments of both chambers, to deal with issues or matters affecting both houses, such as a concurrent budget resolution, or to create a temporary joint committee. Concurrent resolutions are not submitted to the President/Governor and thus do not have the force of law.
• Continuance: Putting off of a hearing ot trial until a later time.
• 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
• Converted entity: means an organization resulting from a conversion. See Texas Business Organizations Code 1.002
• Converting entity: means an organization as the organization existed before the organization's conversion. See 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
• Court: means and includes:
  (1) a county court in the exercise of its probate jurisdiction;
  (2) a court created by statute and authorized to exercise original probate jurisdiction; and
  (3) a district court exercising original probate jurisdiction in a contested matter. See Texas Estates Code 22.007
• Court reporter: A person who makes a word-for-word record of what is said in court and produces a transcript of the proceedings upon request.
• Deed: The legal instrument used to transfer title in real property from one person to another.
• Department: means the Department of State Health Services. See Texas Health and Safety Code 486.001
• Devise: To gift property by will.
• Devisee: includes a legatee. See Texas Estates Code 22.009
• Director: means an individual who serves on the board of directors of a foreign or domestic corporation. See Texas Business Organizations Code 1.002
• 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
• Donee: The recipient of a gift.
• Donor: The person who makes a gift.
• Effective date of this code: means January 1, 2006. See Texas Business Organizations Code 1.002
• Electronic data system: means an electronic network or database. See Texas Business Organizations Code 1.002
• Electronic transmission: means a form of communication, including communication by use of or participation in one or more electronic data systems, that:
  (A) does not directly involve the physical transmission of paper;
  (B) creates a record that may be retained, retrieved, and reviewed by the recipient; and
  (C) may be directly reproduced in paper form by the recipient through an automated process. See Texas Business Organizations Code 1.002
• Enrolled bill: The final copy of a bill or joint resolution which has passed both chambers in identical form. It is printed on parchment paper, signed by appropriate officials, and submitted to the President/Governor for signature.
• Entitlement: A Federal program or provision of law that requires payments to any person or unit of government that meets the eligibility criteria established by law. Entitlements constitute a binding obligation on the part of the Federal Government, and eligible recipients have legal recourse if the obligation is not fulfilled. Social Security and veterans' compensation and pensions are examples of entitlement programs.
• Entity: means a domestic entity or foreign entity. See Texas Business Organizations Code 1.002
• Escrow: Money given to a third party to be held for payment until certain conditions are met.
• Estate: means a decedent's property, as that property:
  (1) exists originally and as the property changes in form by sale, reinvestment, or otherwise;
  (2) is augmented by any accretions and other additions to the property, including any property to be distributed to the decedent's representative by the trustee of a trust that terminates on the decedent's death, and substitutions for the property; and
  (3) is diminished by any decreases in or distributions from the property. See Texas Estates Code 22.012
• Ex officio: Literally, by virtue of one's office.
• Executive commissioner: means the executive commissioner of the Health and Human Services Commission. See Texas Health and Safety Code 486.001
• 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}
• Federal Reserve System: The central bank of the United States. The Fed, as it is commonly called, regulates the U.S. monetary and financial system. The Federal Reserve System is composed of a central governmental agency in Washington, D.C. (the Board of Governors) and twelve regional Federal Reserve Banks in major cities throughout the United States. ^{Source: OCC}
• Fee simple: Absolute title to property with no limitations or restrictions regarding the person who may inherit it.
• Filing instrument: means an instrument, document, consent, or statement that is required or authorized by this code to be filed by or for an entity with the filing officer in accordance with Chapter 4. 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.
• Fixed Rate: Having a "fixed" rate means that the APR doesn't change based on fluctuations of some external rate (such as the "Prime Rate"). In other words, a fixed rate is a rate that is not a variable rate. A fixed APR can change over time, in several circumstances:
  • You are late making a payment or commit some other default, triggering an increase to a penalty rate
  • The bank changes the terms of your account and you do not reject the change.
  • The rate expires (if the rate was fixed for only a certain period of time).
• For-profit corporation: means a corporation governed as a for-profit corporation under Chapter 21. See 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
• Fundamental business transaction: means a merger, interest exchange, conversion, or sale of all or substantially all of an entity's assets. 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.
• 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
• Governmental agency of the state: means :
  (1) a municipality;
  (2) a county;
  (3) a public school district;
  (4) a special-purpose district or authority;
  (5) a board, commission, department, office, or other agency in the executive branch of state government, including an institution of higher education, as defined by § 61. See Texas Estates Code 22.014
• Heir: means a person who is entitled under the statutes of descent and distribution to a part of the estate of a decedent who dies intestate. See Texas Estates Code 22.015
• 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
• 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
• Inter vivos: Transfer of property from one living person to another living person.
• Interest exchange: means the acquisition of an ownership or membership interest in a domestic entity as provided by Subchapter 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
• Interrogatories: Written questions asked by one party of an opposing party, who must answer them in writing under oath; a discovery device in a lawsuit.
• Intestate: Dying without leaving a will.
• Irrevocable trust: A trust arrangement that cannot be revoked, rescinded, or repealed by the grantor.
• Joint committee: Committees including membership from both houses of teh legislature. Joint committees are usually established with narrow jurisdictions and normally lack authority to report legislation.
• Judge: means the presiding judge of any court having original jurisdiction over probate proceedings, regardless of whether the court is:
  (1) a county court in the exercise of its probate jurisdiction;
  (2) a court created by statute and authorized to exercise probate jurisdiction; or
  (3) a district court exercising probate jurisdiction in a contested matter. See Texas Estates Code 22.019
• 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
• Legislative session: That part of a chamber's daily session in which it considers legislative business (bills, resolutions, and actions related thereto).
• Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
• Licensed practitioner: includes a sex offender treatment provider who is licensed under Chapter 110, Occupations Code. See Texas Health and Safety Code 1.005
• Life estate: A property interest limited in duration to the life of the individual holding the interest (life tenant).
• 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
• 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 has become, and has not ceased to be, a member in the limited liability company as provided by its governing documents or this code;
  (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
• 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
• Minor: means a person younger than 18 years of age who:
  (1) has never been married; and
  (2) has not had the disabilities of minority removed for general purposes. See Texas Estates Code 22.022
• Mixed beverage: means one or more servings of a beverage composed in whole or part of an alcoholic beverage in a sealed or unsealed container of any legal size for consumption on the premises where served or sold by the holder of a mixed beverage permit, the holder of certain nonprofit entity temporary event permits, the holder of a private club registration permit, or the holder of certain retailer late hours certificates. See Texas Alcoholic Beverage Code 1.04
• National Bank: A bank that is subject to the supervision of the Comptroller of the Currency. The Office of the Comptroller of the Currency is a bureau of the U.S. Treasury Department. A national bank can be recognized because it must have "national" or "national association" in its name. ^{Source: OCC}
• 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
• Nolo contendere: No contest-has the same effect as a plea of guilty, as far as the criminal sentence is concerned, but may not be considered as an admission of guilt for any other purpose.
• Non-code organization: means an organization other than a domestic entity. See Texas Business Organizations Code 1.002
• Nonprofit corporation: means a corporation governed as a nonprofit corporation under Chapter 22. See Texas Business Organizations Code 1.002
• 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
• Official oath: means the oath required by Article XVI, Section Texas Government Code 312.011
• 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
• Parliamentarian: The Parliamentarian is an advisor on the interpretation of legislative rules and procedures.
• Partnership: means an entity governed as a partnership under Title 4. 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: includes a natural person and a corporation. See Texas Estates Code 22.027
• 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
• person interested: means :
  (1) an heir, devisee, spouse, creditor, or any other having a property right in or claim against an estate being administered; and
  (2) anyone interested in the welfare of an incapacitated person, including a minor. See Texas Estates Code 22.018
• personal representative: include :
  (1) an executor and independent executor;
  (2) an administrator, independent administrator, and temporary administrator; and
  (3) a successor to an executor or administrator listed in Subdivision (1) or (2). See Texas Estates Code 22.031
• Plaintiff: The person who files the complaint in a civil lawsuit.
• Plan of conversion: means a document that conforms with the requirements of § 10. See Texas Business Organizations Code 1.002
• Plan of exchange: means a document that conforms with the requirements of § 10. See 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
• 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
• Presiding officer: A majority-party Senator who presides over the Senate and is charged with maintaining order and decorum, recognizing Members to speak, and interpreting the Senate's rules, practices and precedents.
• Pro se: A Latin term meaning "on one's own behalf"; in courts, it refers to persons who present their own cases without lawyers.
• Property: includes tangible and intangible property and an interest in that property. See Texas Business Organizations Code 1.002
• Prosecute: To charge someone with a crime. A prosecutor tries a criminal case on behalf of the government.
• Quorum: The number of legislators that must be present to do business.
• Real estate investment trust: means an entity governed as a real estate investment trust under Title 5. See Texas Business Organizations Code 1.002
• Real-time electronic logging system: means a system intended to be used by law enforcement agencies and pharmacies or other business establishments that:
  (A) is installed, operated, and maintained free of any one-time or recurring charge to the business establishment or to the state;
  (B) is able to communicate in real time with similar systems operated in other states and similar systems containing information submitted by more than one state;
  (C) complies with the security policy of the Criminal Justice Information Services division of the Federal Bureau of Investigation;
  (D) complies with information exchange standards adopted by the National Information Exchange Model;
  (E) uses a mechanism to prevent the completion of a sale of a product containing ephedrine, pseudoephedrine, or norpseudoephedrine that would violate state or federal law regarding the purchase of a product containing those substances; and
  (F) is equipped with an override of the mechanism described in Paragraph (E) that:
  (i) may be activated by an employee of a business establishment; and
  (ii) creates a record of each activation of the override. See Texas Health and Safety Code 486.001
• 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.
• Remand: When an appellate court sends a case back to a lower court for further proceedings.
• Restitution: The court-ordered payment of money by the defendant to the victim for damages caused by the criminal action.
• Right of rescission: Right to cancel, within three business days, a contract that uses the home of a person as collateral, except in the case of a first mortgage loan. There is no fee to the borrower, who receives a full refund of all fees paid. The right of rescission is guaranteed by the Truth in Lending Act (TILA). ^{Source: OCC}
• Right of survivorship: The ownership rights that result in the acquisition of title to property by reason of having survived other co-owners.
• Sale: includes a conveyance, exchange, barter, or trade. See Texas Health and Safety Code 486.001
• 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
• Simple resolution: Designated "S. Res.," simple resolutions are used to express nonbinding positions of the Senate or to deal with the Senate's internal affairs, such as the creation of a special committee. They do not require action by the House of Representatives.
• 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 of limitations: A law that sets the time within which parties must take action to enforce their rights.
• Statutory probate court: means a court created by statute and designated as a statutory probate court under Chapter 25, Government Code. See Texas Estates Code 22.007
• 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
• Swear: includes affirm. See Texas Government Code 311.005
• Testator: A male person who leaves a will at death.
• 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.
• Uphold: The decision of an appellate court not to reverse a lower court decision.
• Veto: The procedure established under the Constitution by which the President/Governor refuses to approve a bill or joint resolution and thus prevents its enactment into law. A regular veto occurs when the President/Governor returns the legislation to the house in which it originated. The President/Governor usually returns a vetoed bill with a message indicating his reasons for rejecting the measure. In Congress, the veto can be overridden only by a two-thirds vote in both the Senate and the House.
• 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