Texas Business Organizations Code
§ 21.157 — ISSUANCE OF SHARES
BO § 21.157Title 2. CORPORATIONS · Ch. 21. FOR-PROFIT CORPORATIONS · Art. D. SHARES, OPTIONS, AND CONVERTIBLE SECURITIES
Statute text
View on source(a)Except as provided by Section 21.158, a corporation may issue shares for consideration if authorized by the board of directors of the corporation. Shares may be issued in one or more transactions in the number, at the time, and for the consideration stated in or determined by the authorization of the board of directors.
(b)Shares may not be issued until the consideration, determined in accordance with this subchapter, has been paid or delivered as required in connection with the authorization of the shares. When the consideration is paid or delivered:
(1)the shares are considered to be issued;
(2)the subscriber or other person entitled to receive the shares is a shareholder with respect to the shares; and
(3)the shares are considered fully paid and nonassessable.
(c)This subsection applies only to shares issued in accordance with Subsections (a) and (b) and Sections 21.160 and 21.161 for consideration consisting, wholly or partly, of a contract for future services or benefits or a promissory note. A corporation may place the shares, although fully paid and nonassessable, in escrow, or make other arrangements to restrict the transfer of the shares, and may credit distributions made with respect to the shares against their purchase price, until the services are performed, the note is paid, or the benefits are received. If the services are not performed, the note is not paid, or the benefits are not received, the corporation may pursue remedies provided or afforded under law or in the contract or note, including causing the shares that are placed in escrow or restricted to be forfeited or returned to or reacquired by the corporation and the distributions that have been credited to be wholly or partly returned to the corporation.
…
Legislative history
Acts 2009, 81st Leg., R.S., Ch. 84 (S.B. 1442), Sec. 30, eff. September 1, 2009. Acts 2017, 85th Leg., R.S., Ch. 75 (S.B. 1518), Sec. 6, eff. September 1, 2017. Acts 2023, 88th Leg., R.S., Ch. 27 (S.B. 1514), Sec. 22, eff. September 1, 2023.