Texas Business Organizations Code

§ 21.730 — LACK OF FORMALITIES; TREATMENT AS PARTNERSHIP

BO § 21.730Title 2. CORPORATIONS · Ch. 21. FOR-PROFIT CORPORATIONS · Art. O. CLOSE CORPORATION

Statute text

The failure of a close corporation under this subchapter to observe a usual formality or requirement prescribed for an ordinary corporation by this chapter relating to the exercise of corporate powers or the management of a corporation's business and affairs and the performance of a shareholders' agreement that treats the close corporation as if the corporation were a partnership or in a manner that otherwise is appropriate only among partners may not:

(1)be a factor in determining whether to impose personal liability on the shareholders for the close corporation's obligations by disregarding the separate entity of the close corporation or otherwise;

(2)be grounds for invalidating an otherwise valid shareholders' agreement; or

(3)affect the status of the close corporation as a corporation under this chapter or other law.

Legislative history

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