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Texas Business Organizations Code - BUS ORG § 21.729. Limitation of Shareholder's Liability

Current as of January 01, 2024 | Updated by Findlaw Staff

(a) A shareholder of a close corporation described by Section 21.725 is not liable because of a shareholders' vote or shareholder action without a vote unless the shareholder had the right to vote or consent to the action.

(b) A shareholder of a close corporation, without regard to the right to vote or consent, may not be held liable for an action taken by the shareholders or a person empowered to manage the business and affairs of the close corporation under a shareholders' agreement if the shareholder dissents from and has not voted for or consented to the action.

(c) The dissent of a shareholder may be proven by:

(1) an entry in the minutes of the meeting of shareholders;

(2) a written dissent filed with the secretary of the meeting before the adjournment of the meeting;

(3) a written dissent that is sent to the secretary of the close corporation:

(A) promptly after the meeting or after a written consent was obtained from the other shareholders;  and

(B) by certified or registered mail, return receipt requested, or by other means specified in the corporation's governing documents;  or

(4) any other means reasonably evidencing the dissent.

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Cite this article: FindLaw.com - Texas Business Organizations Code - BUS ORG § 21.729. Limitation of Shareholder's Liability - last updated January 01, 2024 | https://codes.findlaw.com/tx/business-organizations-code/bus-org-sect-21-729/

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