Texas Business Organizations Code

§ 21.105 — RIGHT OF RESCISSION; KNOWLEDGE OF PURCHASER OF SHARES

BO § 21.105Title 2. CORPORATIONS · Ch. 21. FOR-PROFIT CORPORATIONS · Art. C. SHAREHOLDERS' AGREEMENTS

Statute text

(a)A purchaser of shares who does not have knowledge at the time of purchase of the existence of a shareholders' agreement authorized by this subchapter is entitled to rescind the purchase.

(b)A purchaser is considered to have knowledge of the existence of the shareholders' agreement for purposes of this section if:

(1)the existence of the agreement is noted on the certificate or information statement for the shares as required by Section 21.103; and

(2)with respect to shares that are not represented by a certificate, the information statement noting existence of the agreement is delivered to the purchaser not later than the time the shares are purchased.

(c)An action to enforce the right of rescission authorized by this section must be commenced not later than the earlier of:

(1)the 90th day after the date the existence of the shareholder agreement is discovered; or

…

Legislative history

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.