The Texas Clauses Relating to Dividends and Distributions are specific sections within Texas state law that pertain to the distribution of profits and earnings by corporations. These clauses ensure that corporations operating in the state of Texas adhere to certain regulations and guidelines regarding the payment of dividends and distributions to shareholders. One key type of Texas Clause Relating to Dividends is the "Preference Clause." This clause states that certain shareholders may be entitled to receive dividends before other shareholders based on their class or preferred stock status. This ensures that shareholders with higher priority receive their dividends first. Another type of Texas Clause Relating to Dividends is the "Cumulative Clause." This clause requires corporations to accumulate any unpaid dividends from previous periods and pay them to shareholders in subsequent periods before distributing dividends to other shareholders. This ensures that shareholders who did not receive dividends in past periods are compensated before others. Furthermore, Texas Clauses Relating to Distributions include the "Restriction Clause." This clause gives corporations the authority to place restrictions on the distribution of dividends or earnings. These restrictions may be imposed for various reasons, such as ensuring the financial stability of the corporation or meeting certain legal requirements. Additionally, the "Prohibition Clause" is another type of Texas Clause Relating to Distributions. This clause allows corporations to prohibit or limit the distribution of dividends or earnings altogether. Such restrictions may be implemented during financially challenging periods or to retain capital for future investments or expansion. Overall, these Texas Clauses Relating to Dividends and Distributions play a crucial role in regulating how corporations in Texas handle the payment and distribution of dividends and earnings to their shareholders. These clauses ensure fairness, transparency, and compliance with legal requirements, ultimately protecting the interests of both the corporation and its shareholders.
Texas Clauses Relating to Dividends, Distributions
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General Standards for Directors. (a) A director shall discharge the director's duties, including duties as a committee member, in good faith, with ordinary care, and in a manner the director reasonably believes to be in the best interest of the corporation.
Section 21.418 - Contracts or Transactions Involving Interested Directors and Officers (a) This section applies to a contract or transaction between a corporation and: (1) one or more directors or officers, or one or more affiliates or associates of one or more directors or officers, of the corporation; or (2) an ...
(a) The act of a majority of the directors present at a meeting at which a quorum is present at the time of the act is the act of the board of directors of a corporation, unless the act of a greater number is required by the certificate of formation or bylaws of the corporation or by this code.
A member of a corporation, on written demand stating the purpose of the demand, is entitled to examine and copy at the member's expense, in person or by agent, accountant, or attorney, at any reasonable time and for a proper purpose, the books and records of the corporation relevant to that purpose.
Section 21.563 - Closely Held Corporation (a) In this section, "closely held corporation" means a corporation that has: (1) fewer than 35 shareholders; and (2) no shares listed on a national securities exchange or regularly quoted in an over-the-counter market by one or more members of a national securities association ...
(a) Regular meetings of the board of directors of a corporation may be held with or without notice as prescribed by the corporation's bylaws. (b) Special meetings of the board of directors shall be held with notice as prescribed by the bylaws.
(b) Except as provided by this code, the certificate of formation of a filing entity may authorize the owners or members of the entity to take action without holding a meeting, providing prior notice, or taking a vote if owners or members of the entity having at least the minimum number of votes that would be necessary ...