Texas Business Organizations Code 22.055 – Power to Assist Employee or Officer
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(a) A corporation may lend money to or otherwise assist an employee or officer of the corporation, but not a director, if the loan or assistance may reasonably be expected to directly or indirectly benefit the corporation.
(b) A loan made to an officer must be:
(1) made for the purpose of financing the officer’s principal residence; or
(2) set in an original principal amount that does not exceed:
(A) 100 percent of the officer’s annual salary, if the loan is made before the first anniversary of the officer’s employment; or
(B) 50 percent of the officer’s annual salary, if the loan is made in any subsequent year.
Terms Used In Texas Business Organizations Code 22.055
- 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
- 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
- Year: means 12 consecutive months. See Texas Government Code 311.005