Texas Water Code 67.008 – Distribution of Profits
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(a) The incorporators may provide in the charter of the corporation that a dividend will not be paid on the stock and that all profits of the corporation will be paid annually to political subdivisions, private corporations, or other persons that have transacted business with the corporation during the previous year.
(b) The corporation shall distribute any profits under Subsection (a) in direct proportion to the amount of business the corporation transacts with each entity during that year.
Terms Used In Texas Water Code 67.008
- 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.
- Year: means 12 consecutive months. See Texas Government Code 311.005
(c) The corporation may not make a distribution under Subsection (a) if the corporation has unpaid indebtedness.
(d) A corporation may allocate to a sinking fund an amount of the annual profits as determined necessary by the board for maintenance, operation, and replacements.