Delaware Articles 5.11, 5.12 and 5.13 of Texas Business Corporation Act

• Category: Corporations - Mergers and Acquisitions
• State: Multi-State
• Control #: US-CC-12-1358I
• Format: Word; Rich Text

Description

This is a sample of certain articles contained in the Texas Business Corp. Act, which may be used across the United States. These articles discuss appraisal rights provisions. Delaware Articles 5.11, 5.12, and 5.13 of the Texas Business Corporation Act are legislative provisions that deal with various aspects pertaining to Texas corporations. It is worth noting that these are specific sections of the Texas Business Corporation Act and not the Delaware state-specific regulations. When referencing Delaware in this context, it means that the Texas Act has modeled some provisions after the Delaware General Corporation Law (DCL), which is known for its business-friendly regulations. Let's explore each of these articles in more detail: 1. Article 5.11: "Preemptive Rights" Under Article 5.11 of the Texas Business Corporation Act, preemptive rights are defined and outlined for shareholders. Preemptive rights give shareholders the first opportunity to purchase additional shares issued by the corporation to maintain their proportional ownership. These rights protect existing shareholders from dilution and allow them to maintain their percentage of ownership when the company seeks to raise additional capital. The specific provisions regarding preemptive rights can help corporations in Texas determine the conditions and limitations under which such rights can be exercised. 2. Article 5.12: "Authorized, Issued, and Outstanding Shares" Article 5.12 concerns the authorized, issued, and outstanding shares of a Texas corporation. It outlines the different classes and series of shares that a corporation can issue, as well as the procedures for authorizing and issuing shares to shareholders. This article further clarifies the rights and restrictions associated with each class or series of shares, including their voting power, dividend entitlements, and liquidation preferences. Understanding Article 5.12 is essential for corporations in Texas as it governs the structure of share capital and the corresponding rights and obligations of shareholders. 3. Article 5.13: "Preferred Stock" Article 5.13 of the Texas Business Corporation Act deals with preferred stock, a class of shares that grants specific rights and privileges to shareholders over common stockholders. It outlines the characteristics of preferred stock, such as dividend preferences, liquidation preferences, redemption provisions, and conversion rights. This article allows Texas corporations to issue preferred stock to attract investors who prefer more predictable returns or certain privileges associated with this class of equity ownership. While these articles refer to provisions in the Texas Business Corporation Act, it is important to understand that Delaware state law has greatly influenced the drafting of these sections. By incorporating aspects from Delaware's DCL, Texas aimed to provide corporations operating within their jurisdiction with regulatory familiarity and certainty. Please note that the specific articles or sections within the Delaware General Corporation Law (DCL) may not directly correspond to the 5.11, 5.12, or 5.13 references in the Texas Business Corporation Act.

Delaware Articles 5.11, 5.12, and 5.13 of the Texas Business Corporation Act are legislative provisions that deal with various aspects pertaining to Texas corporations. It is worth noting that these are specific sections of the Texas Business Corporation Act and not the Delaware state-specific regulations. When referencing Delaware in this context, it means that the Texas Act has modeled some provisions after the Delaware General Corporation Law (DCL), which is known for its business-friendly regulations. Let's explore each of these articles in more detail: 1. Article 5.11: "Preemptive Rights" Under Article 5.11 of the Texas Business Corporation Act, preemptive rights are defined and outlined for shareholders. Preemptive rights give shareholders the first opportunity to purchase additional shares issued by the corporation to maintain their proportional ownership. These rights protect existing shareholders from dilution and allow them to maintain their percentage of ownership when the company seeks to raise additional capital. The specific provisions regarding preemptive rights can help corporations in Texas determine the conditions and limitations under which such rights can be exercised. 2. Article 5.12: "Authorized, Issued, and Outstanding Shares" Article 5.12 concerns the authorized, issued, and outstanding shares of a Texas corporation. It outlines the different classes and series of shares that a corporation can issue, as well as the procedures for authorizing and issuing shares to shareholders. This article further clarifies the rights and restrictions associated with each class or series of shares, including their voting power, dividend entitlements, and liquidation preferences. Understanding Article 5.12 is essential for corporations in Texas as it governs the structure of share capital and the corresponding rights and obligations of shareholders. 3. Article 5.13: "Preferred Stock" Article 5.13 of the Texas Business Corporation Act deals with preferred stock, a class of shares that grants specific rights and privileges to shareholders over common stockholders. It outlines the characteristics of preferred stock, such as dividend preferences, liquidation preferences, redemption provisions, and conversion rights. This article allows Texas corporations to issue preferred stock to attract investors who prefer more predictable returns or certain privileges associated with this class of equity ownership. While these articles refer to provisions in the Texas Business Corporation Act, it is important to understand that Delaware state law has greatly influenced the drafting of these sections. By incorporating aspects from Delaware's DCL, Texas aimed to provide corporations operating within their jurisdiction with regulatory familiarity and certainty. Please note that the specific articles or sections within the Delaware General Corporation Law (DCL) may not directly correspond to the 5.11, 5.12, or 5.13 references in the Texas Business Corporation Act.