Texas Business Organizations Code 301.008 – Duties and Powers of Owner or Managerial Official Who Ceases to Be Licensed; Purchase of Ownership Interest
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(a) A managerial official of a professional entity who ceases to satisfy the requirements of Section 301.007 shall promptly resign the person‘s position and employment with the entity.
(b) An owner of a professional entity who ceases to be an authorized person as required by Section 301.007 shall promptly relinquish the person’s ownership interest in the entity.
Terms Used In Texas Business Organizations Code 301.008
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Entity: means a domestic entity or foreign entity. 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 - Managerial official: means an officer or a governing person. See Texas Business Organizations Code 1.002
- Ownership interest: means an owner's interest in an 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
- Professional entity: has the meaning assigned by § 301. See Texas Business Organizations Code 1.002
(c) A person who succeeds to the ownership interest of an owner shall promptly relinquish the person’s financial interest in the entity if the person is not an authorized person as required by Section 301.007.
(d) A professional entity shall purchase or cause to be purchased the ownership interest in the entity of a person who is required to relinquish the person’s financial interest in the entity under this section. The price and terms of a purchase of an ownership interest required under this subsection may be provided by the governing documents of the entity or an applicable agreement.
(e) A person who owns all of the outstanding ownership interests in a professional entity but is required under this section to relinquish the person’s financial interest in the entity may act as a managerial official or owner of the entity only for the purpose of winding up the affairs of the entity, including selling the outstanding ownership interests and other assets of the entity.