Texas Business Organizations Code 21.206 – Limitation On Action to Enforce Preemptive Right
(a) An action brought against a corporation, the board of directors or an officer, shareholder, or agent of the corporation, or an owner of a beneficial interest in shares of the corporation for the violation of a preemptive right of a shareholder under Sections 21.203 and 21.204 must be brought not later than the earlier of:
(1) the first anniversary of the date written notice is given to each shareholder whose preemptive right was violated; or
(2) the fourth anniversary of the latest of:
(A) the date the corporation issued the shares, securities, or rights;
(B) the date the corporation sold the shares, securities, or rights; or
(C) the date the corporation otherwise distributed the shares, securities, or rights.
(b) The notice required by Subsection (a)(1) must:
(1) be sent to the holder at the address for the holder as shown on the appropriate records of the corporation; and
(2) inform the holder that the issuance, sale, or other distribution of shares, securities, or rights violated the holder’s preemptive right.
Terms Used In Texas Business Organizations Code 21.206
- 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
- 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
- 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