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Texas Business Organizations Code - BUS ORG § 21.730. Lack of Formalities;  Treatment as Partnership

Current as of April 14, 2021 | Updated by FindLaw Staff

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.

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Cite this article: FindLaw.com - Texas Business Organizations Code - BUS ORG § 21.730. Lack of Formalities;  Treatment as Partnership - last updated April 14, 2021 | https://codes.findlaw.com/tx/business-organizations-code/bus-org-sect-21-730/

Read this complete Texas Business Organizations Code - BUS ORG § 21.730. Lack of Formalities;  Treatment as Partnership on Westlaw

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