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Texas Business Organizations Code - BUS ORG § 21.905. Shareholder Approval of Ratified Defective Corporate Act Required;  Exception

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

Each defective corporate act ratified under Section 21.903 must be submitted to shareholders for approval as provided by Sections 21.906 and 21.907, unless:

(1)(A) no other provision of the corporate statute, no provision of the corporation's governing documents, and no provision of any plan or agreement to which the corporation is a party would have required shareholder approval of:

(i) the defective corporate act to be ratified at the time of that defective corporate act;  or

(ii) the type of defective corporate act to be ratified at the time the board of directors adopts the resolutions ratifying that defective corporate act under Section 21.903;  and

(B) the defective corporate act to be ratified did not result from a failure to comply with Subchapter M;  1  or

(2) as of the record date for determining the shareholders entitled to vote on the ratification of the defective corporate act, there are no valid shares outstanding and entitled to vote on the ratification, regardless of whether as of that record date there exist any putative shares.

1  V.T.C.A., Business Organizations Code § 21.601.
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Cite this article: FindLaw.com - Texas Business Organizations Code - BUS ORG § 21.905. Shareholder Approval of Ratified Defective Corporate Act Required;  Exception - last updated January 01, 2024 | https://codes.findlaw.com/tx/business-organizations-code/bus-org-sect-21-905/

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