Texas Business Organizations Code 21.318 – Contribution From Certain Shareholders and Directors
Current as of: 2024 | Check for updates
|
Other versions
(a) A director who is held liable for a claim asserted under § 21.316 is entitled to receive contributions from shareholders who accepted or received the wrongful distribution knowing that it was prohibited by § 21.303 in proportion to the amounts received by the shareholders.
(b) A director who is liable for a claim asserted under § 21.316 is entitled to receive contributions from each of the other directors who are liable with respect to that claim in an amount appropriate to achieve equity.
Terms Used In Texas Business Organizations Code 21.318
- Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
- Business: means a trade, occupation, profession, or other commercial activity. 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
- Director: means an individual who serves on the board of directors of a foreign or domestic corporation. See Texas Business Organizations Code 1.002
- United States: includes a department, bureau, or other agency of the United States of America. See Texas Government Code 311.005
(c) The liability provided by Subsection (a) is the only liability of a shareholder to the corporation or a creditor of the corporation for accepting or receiving a distribution by the corporation that is prohibited by § 21.303, except for any liability under Chapter 24, Business & Commerce Code, or the United States Bankruptcy Code.