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Texas Business Organizations Code

§ 22.055 — POWER TO ASSIST EMPLOYEE OR OFFICER

BO § 22.055Title 2. CORPORATIONS · Ch. 22. NONPROFIT CORPORATIONS · Art. B. PURPOSES AND POWERS

Statute text

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(a)A corporation may lend money to or otherwise assist an employee or officer of the corporation, but not a director, if the loan or assistance may reasonably be expected to directly or indirectly benefit the corporation.
(b)A loan made to an officer must be:
(1)made for the purpose of financing the officer's principal residence; or
(2)set in an original principal amount that does not exceed:
(A)100 percent of the officer's annual salary, if the loan is made before the first anniversary of the officer's employment; or
(B)50 percent of the officer's annual salary, if the loan is made in any subsequent year.

Legislative history

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

Source: Texas Business Organizations Code § 22.055 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.