Tex. Bus. Orgs. Code § 21.555 · Subchapter L. DERIVATIVE PROCEEDINGS
STAY OF PROCEEDING.
Text — Current through the 89th 2nd Called Legislative Session, 2025
(a) If the corporation that is the subject of a derivative proceeding commences an inquiry into the allegations made in a demand or petition and the person or group of persons described by Section 21.554 is conducting an active review of the allegations in good faith, the court shall stay a derivative proceeding for not more than 60 days until the review is completed and a determination is made by the person or group regarding what further action, if any, should be taken.
(b) To obtain a stay, the corporation must provide the court with a written statement agreeing to advise the court and the shareholder making the demand of the determination promptly on the completion of the review of the matter.
(c) A stay, on motion, may be reviewed every 60 days for continuation of the stay if the corporation provides the court and the shareholder with a written statement of the status of the review and the reasons why an extension for a period not to exceed 60 additional days is appropriate. An extension shall be granted for a period not to exceed 60 days if the court determines that the continuation is appropriate in the interests of the corporation.
Notes and commentary — not statutory text
History
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 899 (H.B. 3603), Sec. 5, eff. September 1, 2019.
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 d2f8751e2ebaca585ce689dc70fa7060a1faa22f9723e0755f23cd2c5f2b2528
- 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
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Business Organizations Code
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