Texas Business Organizations Code 21.154 – Certain Optional Characteristics of Shares
(a) Subject to Sections 21.152 and 21.153, if authorized by the corporation‘s certificate of formation, a corporation may issue shares that:
(1) are redeemable, at the option of the corporation, shareholder, or other person or on the occurrence of a designated event, subject to Sections 21.303 and 21.304;
(2) entitle the holders of the shares to cumulative, noncumulative, or partially cumulative distributions;
(3) have preferences over any or all other classes or series of shares with respect to payment of distributions;
(4) have preferences over any or all other classes or series of shares with respect to the assets of the corporation on the voluntary or involuntary winding up and termination of the corporation;
(5) are exchangeable, at the option of the corporation, shareholder, or other person or on the occurrence of a designated event, for shares, obligations, indebtedness, evidence of ownership, rights to purchase securities of the corporation or one or more other entities, or other property or for a combination of those rights, assets, or obligations, subject to § 21.303; and
(6) are convertible into shares of any other class or series, at the option of the corporation, shareholder, or other person or on the occurrence of a designated event.
(b) Shares without par value may not be converted into shares with par value unless:
(1) at the time of conversion, the part of the corporation’s stated capital represented by the shares without par value is at least equal to the aggregate par value of the shares to be converted; or
(2) the amount of any deficiency computed under Subdivision (1) is transferred from surplus to stated capital.
Terms Used In Texas Business Organizations Code 21.154
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- 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 - 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 - 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
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- 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
- Property: includes tangible and intangible property and an interest in that property. See Texas Business Organizations Code 1.002