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Texas Business Organizations Code

§ 21.311 — LIMITATIONS ON SHARE DIVIDENDS

BO § 21.311Title 2. CORPORATIONS · Ch. 21. FOR-PROFIT CORPORATIONS · Art. G. DISTRIBUTIONS AND SHARE DIVIDENDS

Statute text

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A corporation may not pay a share dividend in authorized but unissued shares of any class if:
(1)the surplus of the corporation is less than the amount required by Section 21.313 to be transferred to stated capital at the time the share dividend is made; or
(2)the share dividend will be made to a holder of shares of any other class or series, unless:
(A)the corporation's certificate of formation provides for the dividend; or
(B)the share dividend is authorized by the holders of at least a majority of the outstanding shares of the class or series in which the share dividend is to be made.

Legislative history

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

Source: Texas Business Organizations Code § 21.311 from the Texas Constitution and Statutes (Texas Legislature) (public record). DecisionDepot is for informational use only and is not legal advice — verify against the official source before relying on this text.