Texas Business Organizations Code 3.007 – Supplemental Provisions Required in Certificate of Formation of For-Profit or Professional Corporation
(a) In addition to the information required by § 3.005, the certificate of formation of a for-profit or professional corporation must state:
(1) the aggregate number of shares the corporation is authorized to issue;
(2) if the shares the corporation is authorized to issue consist of one class of shares only, the par value of each share or a statement that each share is without par value;
(3) if the corporation is to be managed by a board of directors, the number of directors constituting the initial board of directors and the name and address of each person who will serve as director until the first annual meeting of shareholders and until a successor is elected and qualified; and
(4) if the corporation is to be managed pursuant to a shareholders’ agreement in a manner other than by a board of directors, the name and address of each person who will perform the functions required by this code to be performed by the initial board of directors.
(b) If the shares a for-profit or professional corporation is authorized to issue consist of more than one class of shares, the certificate of formation of the corporation must, with respect to each class, state:
(1) the designation of the class;
(2) the aggregate number of shares in the class;
(3) the par value of each share or a statement that each share is without par value;
(4) the preferences, limitations, and relative rights of the shares; and
(5) if the shares in a class the corporation is authorized to issue consist of more than one series, the following with respect to each series:
(A) the designation of the series;
(B) the aggregate number of shares in the series;
(C) any preferences, limitations, and relative rights of the shares to the extent provided in the certificate of formation; and
(D) any authority vested in the board of directors to establish the series and set and determine the preferences, limitations, and relative rights of the series.
Terms Used In Texas Business Organizations Code 3.007
- 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 - 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
- Entity: means a domestic entity or foreign entity. See Texas Business Organizations Code 1.002
- For-profit corporation: means a corporation governed as a for-profit corporation under Chapter 21. 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
- Professional corporation: has the meaning assigned by § 301. See Texas Business Organizations Code 1.002
- Share: means a unit into which the ownership interest in a for-profit corporation, professional corporation, real estate investment trust, or professional association is divided, regardless of whether the share is certificated or uncertificated. See Texas Business Organizations Code 1.002
- Social purposes: means one or more purposes of a for-profit corporation that are specified in the corporation's certificate of formation and consist of promoting one or more positive impacts on society or the environment or of minimizing one or more adverse impacts of the corporation's activities on society or the environment. See Texas Business Organizations Code 1.002
(c) If the shareholders of a for-profit or professional corporation are to have a preemptive right or cumulative voting right, the certificate of formation of the corporation must comply with § 21.203 or 21.360, as appropriate.
(d) Notwithstanding § 2.008, a for-profit corporation may include one or more social purposes in addition to the purpose or purposes required to be stated in the corporation’s certificate of formation by § 3.005(a)(3). The corporation may also include in the certificate of formation a provision that the board of directors and officers of the corporation shall consider any social purpose specified in the certificate of formation in discharging the duties of directors or officers under this code or otherwise.
(e) Notwithstanding § 2.008, instead of including in its certificate of formation or amending its certificate of formation to include one or more social purposes as provided by Subsection (d), a for-profit corporation may elect to be a public benefit corporation governed by Subchapter S, Chapter 21, by including in its initially filed certificate of formation, or, subject to § 21.954, by amending its certificate of formation to include:
(1) one or more specific public benefits, as defined by § 21.952, to be promoted by the corporation; and
(2) instead of the statement required by § 3.005(a)(2), a statement that the filing entity is a for-profit corporation electing to be a public benefit corporation.