Texas Business Organizations Code

§ 21.314 — DETERMINATION OF SOLVENCY, NET ASSETS, STATED CAPITAL, AND SURPLUS

BO § 21.314Title 2. CORPORATIONS · Ch. 21. FOR-PROFIT CORPORATIONS · Art. G. DISTRIBUTIONS AND SHARE DIVIDENDS

Statute text

(a)For purposes of this subchapter, the determination of whether a corporation is or would be insolvent and the determination of the amount of a corporation's stated capital or surplus, the value of the corporation's net assets, and the amount or value of any component of the corporation's stated capital, surplus, or net assets, may be based on:

(1)financial statements of the corporation, which may include financial statements of subsidiary entities or other entities accounted for on a consolidated basis or on the equity method of accounting, that:

(A)present the financial condition of the corporation, and any subsidiary or other entities included in those financial statements, in accordance with generally accepted accounting principles or international financial reporting standards; or

(B)have been prepared using the method of accounting used to file the corporation's federal income tax return or using any other accounting practices and principles that are reasonable under the circumstances;

(2)financial information, including condensed or summary financial statements, that is prepared on the same basis as financial statements described by Subdivision (1);

(3)a projection, a forecast, or other forward-looking information relating to the future economic performance, financial condition, or liquidity of the corporation that is reasonable under the circumstances;

…

Legislative history

Acts 2021, 87th Leg., R.S., Ch. 39 (S.B. 1203), Sec. 21, eff. September 1, 2021.