Tex. Bus. Orgs. Code § 21.170 · Subchapter D. SHARES, OPTIONS, AND CONVERTIBLE SECURITIES
CONSIDERATION FOR RIGHTS, OPTIONS, AND CONVERTIBLE INDEBTEDNESS.
Text — Current through the 89th 2nd Called Legislative Session, 2025
(a) In the absence of fraud in the transaction, the judgment of the board of directors of a corporation as to the adequacy of the consideration received for rights, options, or convertible indebtedness is conclusive.
(b) A corporation may issue rights or options to its shareholders, officers, consultants, independent contractors, employees, or directors without consideration if, in the judgment of the board of directors, the issuance of the rights or options is in the interests of the corporation.
(c) The consideration for shares having a par value, other than treasury shares, and issued on the exercise of the rights or options may not be less than the par value of the shares.
(d) A privilege of conversion may not be conferred on, or altered with respect to, any indebtedness that would result in the corporation receiving less than the minimum consideration required to be received on issuance of the shares.
(e) The consideration for shares issued on the exercise of rights, options, or convertible indebtedness shall be determined as provided by Section 21.161.
Notes and commentary — not statutory text
History
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Source of truth
- Edition
- Current through the 89th 2nd Called Legislative Session, 2025
- Official file
- https://statutes.capitol.texas.gov/Docs/BO/htm/BO.21.htm
- Text hash
- sha256 dae3ce506f73d5ad12db4f9c10c11e868f638366e907484024fef6f2851fbb61
- Composed by
- compose_tx.py 2026-10-05: the Legislative Council's chapter files read in document order; verify_tx.py's independent reading (lxml DOM walk) agrees character for character
This section cites
Provisions in this library that the text above cites, as it prints each citation. A range cited as “ss. 61.13-61.16” links its first and last provisions.
Procedural information only. Not legal advice and not a substitute for the advice of an attorney. Confirm the current text with the official publisher before relying on it.