Texas Business Organizations Code 21.203 – No Statutory Preemptive Right Unless Provided by Certificate of Formation
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(a) Except as provided by § 21.208, a shareholder of a corporation does not have a preemptive right under this subchapter to acquire the corporation‘s unissued or treasury shares except to the extent provided by the corporation’s certificate of formation.
(b) If the certificate of formation includes a statement that the corporation “elects to have a preemptive right” or a similar statement, § 21.204 applies to a shareholder except to the extent the certificate of formation expressly provides otherwise.
Terms Used In Texas Business Organizations Code 21.203
- 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 - Contract: A legal written agreement that becomes binding when signed.
- 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
- 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 - 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
(c) This section and Sections 21.204 through 21.208 do not invalidate or impair a corporation’s right or power to grant an enforceable nonstatutory preemptive right in:
(1) a contract between the corporation and a shareholder or other person; or
(2) the governing documents of the corporation.