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Texas Business Organizations Code

§ 21.723 — PARTY NOT BOUND BY SHAREHOLDERS' AGREEMENT ON CESSATION; LIABILITY

BO § 21.723Title 2. CORPORATIONS · Ch. 21. FOR-PROFIT CORPORATIONS · Art. O. CLOSE CORPORATION

Statute text

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(a)Notwithstanding the person's signature, a person ceases to be a party to, and bound by, a shareholders' agreement when the person ceases to be a shareholder of the close corporation unless:
(1)the person's attempted cessation was in violation of Section 21.721 or the shareholders' agreement; or
(2)the shareholders' agreement provides to the contrary.
(b)Cessation as a party to a shareholders' agreement or as a shareholder does not relieve a person of liability the person may have incurred for breach of the shareholders' agreement.

Legislative history

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

Source: Texas Business Organizations Code § 21.723 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.