CHAPTER 22. NONPROFIT CORPORATIONS

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BUSINESS ORGANIZATIONS CODE

TITLE 2. CORPORATIONS

CHAPTER 22. NONPROFIT CORPORATIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 22.001. DEFINITIONS. In this chapter:

(1) "Board of directors" means the group of persons vested with

the management of the affairs of the corporation, regardless of

the name used to designate the group.

(2) "Bylaws" means the rules adopted to regulate or manage the

corporation, regardless of the name used to designate the rules.

(3) "Corporation" or "domestic corporation" means a domestic

nonprofit corporation subject to this chapter.

(4) "Foreign corporation" means a foreign nonprofit corporation.

(5) "Nonprofit corporation" means a corporation no part of the

income of which is distributable to a member, director, or

officer of the corporation.

(6) "Ordinary care" means the care that an ordinarily prudent

person in a similar position would exercise under similar

circumstances.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.002. MEETINGS BY REMOTE COMMUNICATIONS TECHNOLOGY.

Subject to the provisions of this code and the certificate of

formation and bylaws of a corporation, a meeting of the members

of a corporation, the board of directors of a corporation, or any

committee designated by the board of directors of a corporation

may be held by means of a remote electronic communications

system, including videoconferencing technology or the Internet,

only if:

(1) each person entitled to participate in the meeting consents

to the meeting being held by means of that system; and

(2) the system provides access to the meeting in a manner or

using a method by which each person participating in the meeting

can communicate concurrently with each other participant.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

SUBCHAPTER B. PURPOSES AND POWERS

Sec. 22.051. GENERAL PURPOSES. A nonprofit corporation may be

formed for any lawful purpose or purposes not expressly

prohibited under this chapter or Chapter 2, including any purpose

described by Section 2.002.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.052. DENTAL HEALTH SERVICE CORPORATION. (a) A

charitable corporation may be formed to operate a dental health

service corporation that manages and coordinates the relationship

between a dentist who contracts to perform dental services and a

patient who will receive the services as a member of a group that

contracted with the dental health service corporation to provide

dental care to group members.

(b) The certificate of formation for a charitable corporation

formed under this section must have attached as an exhibit:

(1) an affidavit of the organizer or organizers stating:

(A) that not less than 30 percent of the dentists legally

engaged in the practice of dentistry in this state have signed a

contract to perform the required dental services for a period of

at least one year after incorporation; and

(B) the names and addresses of those dentists; and

(2) a certification by the State Board of Dental Examiners that:

(A) the applicants are reputable residents of this state of good

moral character; and

(B) the corporation will be in the best interest of the public

health.

12 directors, including 9 directors who are licensed to practice

dentistry in this state and are actively engaged in the practice

of dentistry in this state.

(d) A corporation formed under this section shall maintain as

participating or contracting dentists at least 30 percent of the

number of dentists actually engaged in the practice of dentistry

in this state. The corporation shall file annually in September

with the State Board of Dental Examiners the name and address of

each participating or contracting dentist.

(e) A corporation formed under this section may not:

(1) prevent a patient from selecting the licensed dentist of the

patient's choice to provide dental services to the patient;

(2) deny a licensed dentist the right to participate as a

contracting dentist to perform the dental services contracted for

by the patient;

(3) discriminate among patients or licensed dentists regarding

payment or reimbursement for the cost of performing dental

services; or

(4) authorize any person to regulate, interfere with, or

intervene in any manner in the diagnosis or treatment provided by

a licensed dentist to a patient.

(f) A corporation formed under this section may require the

attending dentist to provide a narrative oral or written

description of the dental services provided to determine benefits

or provide proof of treatment. The corporation may request but

may not require diagnostic aids used in the course of treatment.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.053. DIVIDENDS PROHIBITED. A dividend may not be paid

to, and no part of the income of a corporation may be distributed

to, the corporation's members, directors, or officers.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.054. AUTHORIZED BENEFITS AND DISTRIBUTIONS. A

corporation may:

(1) pay compensation in a reasonable amount to the members,

directors, or officers of the corporation for services provided;

(2) confer benefits on the corporation's members in conformity

with the corporation's purposes; and

(3) make distributions to the corporation's members on winding

up and termination to the extent authorized by this chapter.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.055. POWER TO ASSIST EMPLOYEE OR OFFICER. (a) A

corporation may lend money to or otherwise assist an employee or

officer of the corporation, but not a director, if the loan or

assistance may reasonably be expected to directly or indirectly

benefit the corporation.

(b) A loan made to an officer must be:

(1) made for the purpose of financing the officer's principal

residence; or

(2) set in an original principal amount that does not exceed:

(A) 100 percent of the officer's annual salary, if the loan is

made before the first anniversary of the officer's employment; or

(B) 50 percent of the officer's annual salary, if the loan is

made in any subsequent year.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.056. HEALTH ORGANIZATION CORPORATION. (a) Doctors of

medicine and osteopathy licensed by the Texas State Board of

Medical Examiners and podiatrists licensed by the Texas State

Board of Podiatric Medical Examiners may form a corporation that

is jointly owned, managed, and controlled by those practitioners

to perform a professional service that falls within the scope of

practice of those practitioners and consists of:

(1) carrying out research in the public interest in medical

science, medical economics, public health, sociology, or a

related field;

(2) supporting medical education in medical schools through

grants or scholarships;

(3) developing the capabilities of individuals or institutions

studying, teaching, or practicing medicine, including podiatric

medicine;

(4) delivering health care to the public; or

(5) instructing the public regarding medical science, public

health, hygiene, or a related matter.

(b) When doctors of medicine, osteopathy, and podiatry form a

corporation that is jointly owned by those practitioners, the

authority of each of the practitioners is limited by the scope of

practice of the respective practitioners and none can exercise

control over the other's clinical authority granted by their

respective licenses, either through agreements, the certificate

of formation or bylaws of the corporation, directives, financial

incentives, or other arrangements that would assert control over

treatment decisions made by the practitioner. The Texas State

Board of Medical Examiners and the Texas State Board of Podiatric

Medical Examiners continue to exercise regulatory authority over

their respective licenses.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

SUBCHAPTER C. FORMATION AND GOVERNING DOCUMENTS

Sec. 22.101. INCORPORATION OF CERTAIN ORGANIZATIONS. A

religious society, a charitable, benevolent, literary, or social

association, or a church may incorporate as a corporation

governed by this chapter with the consent of a majority of its

members. Those members shall authorize the organizers to execute

the certificate of formation.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.102. BYLAWS. (a) The initial bylaws of a corporation

shall be adopted by the corporation's board of directors or, if

the management of the corporation is vested in the corporation's

members, by the members.

(b) The bylaws may contain provisions for the regulation and

management of the affairs of the corporation that are consistent

with law and the certificate of formation.

adopt new bylaws, unless:

(1) this chapter or the corporation's certificate of formation

wholly or partly reserves the power exclusively to the

corporation's members;

(2) the management of the corporation is vested in the

corporation's members; or

(3) in amending, repealing, or adopting a bylaw, the members

expressly provide that the board of directors may not amend or

repeal the bylaw.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.103. INCONSISTENCY BETWEEN CERTIFICATE OF FORMATION AND

BYLAW. (a) A provision of a certificate of formation of a

corporation that is inconsistent with a bylaw controls over the

bylaw, except as provided by Subsection (b).

(b) A change in the number of directors by amendment to the

bylaws controls over the number stated in the certificate of

formation, unless the certificate of formation provides that a

change in the number of directors may be made only by amendment

to the certificate.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.104. ORGANIZATION MEETING. (a) After the certificate

of formation is filed, the board of directors named in the

certificate of formation of a corporation shall hold an

organization meeting of the board, either in or out of this

state, at the call of the organizers or a majority of the

directors to adopt bylaws and elect officers and for other

purposes determined by the board at the meeting. The organizers

or directors calling the meeting shall send notice of the time

and place of the meeting to each director named in the

certificate of formation not later than the third day before the

date of the meeting.

(b) A first meeting of the members may be held at the call of

the majority of the directors on notice provided not later than

the third day before the date of the meeting. The notice must

state the purposes of the meeting.

corporation's members, the members shall hold the organization

meeting on the call of an organizer. An organizer who calls the

meeting shall:

(1) send notice of the time and place of the meeting to each

member not later than the third day before the date of the

meeting;

(2) if the corporation is a church, make an oral announcement of

the time and place of the meeting at a regularly scheduled

worship service before the meeting; or

(3) send notice of the meeting in the manner provided by the

certificate of formation.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Amended by:

Acts 2005, 79th Leg., Ch.

64, Sec. 66, eff. January 1, 2006.

Sec. 22.105. PROCEDURES TO ADOPT AMENDMENT TO CERTIFICATE OF

FORMATION BY MEMBERS HAVING VOTING RIGHTS. (a) Except as

provided by Section 22.107(b), to amend the certificate of

formation of a corporation with members having voting rights, the

board of directors of the corporation must adopt a resolution

specifying the proposed amendment and directing that the

amendment be submitted to a vote at an annual or special meeting

of the members having voting rights.

(b) Written notice containing the proposed amendment or a

summary of the changes to be effected by the amendment shall be

given to each member entitled to vote at the meeting within the

time and in the manner provided by this chapter for giving notice

of a meeting of members.

vote required by Section 22.164.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.106. PROCEDURES TO ADOPT AMENDMENT TO CERTIFICATE OF

FORMATION BY MANAGING MEMBERS. (a) To be approved, a proposed

amendment to the certificate of formation of a corporation the

management of the affairs of which is vested in the corporation's

members under Section 22.202 must be submitted to a vote at an

annual, regular, or special meeting of the members.

(b) Except as otherwise provided by the certificate of formation

or bylaws, notice containing the proposed amendment or a summary

of the changes to be effected by the amendment shall be given to

the members within the time and in the manner provided by this

chapter for giving notice of a meeting of members.

vote required by Section 22.164.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.107. PROCEDURES TO ADOPT AMENDMENT TO CERTIFICATE OF

FORMATION BY BOARD OF DIRECTORS. (a) If a corporation has no

members or has no members with voting rights, or in the case of

an amendment under Subsection (b), an amendment to the

corporation's certificate of formation shall be adopted at a

meeting of the board of directors on receiving the vote of

directors required by Section 22.164.

(b) Except as otherwise provided by the certificate of

formation, the board of directors of a corporation with members

having voting rights may, without member approval, adopt

amendments to the certificate of formation to:

(1) extend the duration of the corporation if the corporation

was incorporated when limited duration was required by law;

(2) delete the names and addresses of the initial directors;

(3) delete the name and address of the initial registered agent

or registered office, if a statement of change is on file with

the secretary of state; or

(4) change the corporate name by:

(A) substituting the word "corporation," "incorporated,"

"company," or "limited," or the abbreviation "corp.," "inc.,"

"co.," or "ltd.," for a similar word or abbreviation in the name;

(B) adding, deleting, or changing a geographical attribution to

the name.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.108. NUMBER OF AMENDMENTS SUBJECT TO VOTE AT MEETING.

Any number of amendments to the corporation's certificate of

formation may be submitted to and voted on by a corporation's

members at any one meeting of the members.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.109. RESTATED CERTIFICATE OF FORMATION. (a) The board

of directors of a corporation may adopt a restated certificate of

formation as provided by Subchapter B, Chapter 3, by following

the same procedure to amend the corporation's certificate of

formation provided by Sections 22.104-22.107, except that member

approval is required only if the restated certificate of

formation contains an amendment.

(b) A person shall file a restated certificate of formation as

provided by Chapter 4, and the restated certificate of formation

takes effect as provided by Subchapter B, Chapter 3.

Added by Acts 2005, 79th Leg., Ch.

64, Sec. 67, eff. January 1, 2006.

SUBCHAPTER D. MEMBERS

Sec. 22.151. MEMBERS. (a) A corporation may have one or more

classes of members or may have no members.

(b) If the corporation has one or more classes of members, the

corporation's certificate of formation or bylaws must include:

(1) a designation of each class;

(2) the manner of the election or appointment of the members of

each class; and

(3) the qualifications and rights of the members of each class.

instrument evidencing membership rights, voting rights, or

ownership rights as authorized by the certificate of formation or

bylaws.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.152. IMMUNITY FROM LIABILITY. The members of a

corporation are not personally liable for a debt, liability, or

obligation of the corporation.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.153. ANNUAL MEETING. (a) Except as provided by

Subsection (b), a corporation shall hold an annual meeting of the

members at a time that is stated in or determined in accordance

with the corporation's bylaws.

(b) If the bylaws provide for more than one regular meeting of

members each year, an annual meeting is not required. If an

annual meeting is not required, directors may be elected at a

meeting as provided by the bylaws.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.154. FAILURE TO CALL ANNUAL MEETING. (a) If the board

of directors of a corporation fails to call the annual meeting of

members when required, a member of the corporation may demand

that the meeting be held within a reasonable time. The demand

must be made in writing and sent to an officer of the corporation

by registered mail.

(b) If a required annual meeting is not called before the 61st

day after the date of demand, a member of the corporation may

compel the holding of the meeting by legal action directed

against the board of directors, and each of the extraordinary

writs of common law and of courts of equity are available to the

member to compel the holding of the meeting. Each member has a

justiciable interest sufficient to enable the member to institute

and prosecute the legal proceedings.

time does not result in the winding up and termination of the

corporation.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

688, Sec. 87, eff. September 1, 2007.

Sec. 22.155. SPECIAL MEETINGS OF MEMBERS. A special meeting of

the members of a corporation may be called by:

(1) the president;

(2) the board of directors;

(3) members having not less than one-tenth of the votes entitled

to be cast at the meeting; or

(4) other officers or persons as provided by the certificate of

formation or bylaws of the corporation.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.156. NOTICE OF MEETING. (a) A corporation other than a

church shall provide written notice of the place, date, and time

of a meeting of the members of the corporation and, if the

meeting is a special meeting, the purpose or purposes for which

the meeting is called. The notice shall be delivered to each

member entitled to vote at the meeting not later than the 10th

day and not earlier than the 60th day before the date of the

meeting. Notice may be delivered personally or in accordance with

Section 6.051(b).

(b) Notice of a meeting of the members of a corporation that is

a church is sufficient if given by oral announcement at a

regularly scheduled worship service before the meeting or as

otherwise provided by the certificate of formation or bylaws of

the corporation.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.157. SPECIAL BYLAWS AFFECTING NOTICE. (a) A

corporation may provide in the corporation's bylaws that notice

of an annual or regular meeting is not required.

(b) A corporation having more than 1,000 members at the time a

meeting is scheduled or called may provide notice of a meeting by

publication in a newspaper of general circulation in the

community in which the principal office of the corporation is

located, if the corporation provides for that notice in its

bylaws.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.158. PREPARATION AND INSPECTION OF LIST OF VOTING

MEMBERS. (a) After setting a record date for the notice of a

meeting, a corporation shall prepare an alphabetical list of the

names of all its voting members. The list must identify:

(1) the members who are entitled to notice and the members who

are not entitled to notice of the meeting;

(2) the address of each voting member; and

(3) the number of votes each voting member is entitled to cast

at the meeting.

(b) Not later than the second business day after the date notice

is given of a meeting for which a list was prepared in accordance

with Subsection (a), and continuing through the meeting, the list

of voting members must be available at the corporation's

principal office or at a reasonable place in the municipality in

which the meeting will be held, as identified in the notice of

the meeting, for inspection by members entitled to vote at the

meeting for the purpose of communication with other members

concerning the meeting.

entitled on written demand to inspect and, at the member's

expense and subject to Section 22.351, copy the list at a

reasonable time during the period the list is available for

inspection.

(d) The corporation shall make the list of voting members

available at the meeting. A voting member or voting member's

agent or attorney is entitled to inspect the list at any time

during the meeting or an adjournment of the meeting.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.159. QUORUM OF MEMBERS. (a) Unless otherwise provided

by the certificate of formation or bylaws of a corporation,

members of the corporation holding one-tenth of the votes

entitled to be cast, in person or by proxy, constitute a quorum.

(b) The vote of the majority of the votes entitled to be cast by

the members present or represented by proxy at a meeting at which

a quorum is present is the act of the members meeting, unless the

vote of a greater number is required by law or the certificate of

formation or bylaws.

bylaws, a church incorporated before May 12, 1959, is considered

to have provided in the certificate of formation or bylaws that

members present at a meeting for which notice has been given

constitute a quorum.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.160. VOTING OF MEMBERS. (a) Each member of a

corporation, regardless of class, is entitled to one vote on each

matter submitted to a vote of the corporation's members, except

to the extent that the voting rights of members of a class are

limited, enlarged, or denied by the certificate of formation or

bylaws of the corporation.

(b) A member may vote in person or, unless otherwise provided by

the certificate of formation or bylaws, by proxy executed in

writing by the member or the member's attorney-in-fact.

and expires 11 months after the date of its execution. A proxy

may not be irrevocable for longer than 11 months.

(d) If authorized by the certificate of formation or bylaws of

the corporation, a member vote on any matter may be conducted by

mail, by facsimile transmission, by electronic message, or by any

combination of those methods.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.161. ELECTION OF DIRECTORS. (a) A member entitled to

vote at an election of directors is entitled to vote, in person

or by proxy, for as many persons as there are directors to be

elected and for whose election the member has a right to vote.

(b) If expressly authorized by the corporation's certificate of

formation, the member may cumulate the member's vote by:

(1) giving one candidate a number of votes equal to the number

of the directors to be elected multiplied by the member's vote;

(2) distributing the votes on the same principle among any

number of the candidates.

shall give written notice of the member's intention to the

secretary of the corporation not later than the day preceding the

date of the election.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.162. GREATER VOTING REQUIREMENTS UNDER CERTIFICATE OF

FORMATION. If the corporation's certificate of formation

requires the vote or concurrence of a greater proportion of the

members of a corporation than is required by this chapter with

respect to an action to be taken by the members, the certificate

of formation controls.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.163. RECORD DATE FOR DETERMINATION OF MEMBERS. (a) The

record date for determining members of a corporation may be set

as provided by Section 6.101.

(b) If a record date is not set under Section 6.101:

(1) members on the date of the meeting who are otherwise

eligible to vote are entitled to vote at the meeting;

(2) members at the close of business on the business day

preceding the date notice is given, or if notice is waived, at

the close of business on the business day preceding the date of

the meeting, are entitled to notice of a meeting of members; and

(3) members at the close of business on the later of the day the

board of directors adopts the resolution relating to the action

or the 60th day before the date of the action are entitled to

exercise any rights regarding any other lawful action.

notice of or to vote at a meeting is effective for an adjournment

of the meeting unless the board of directors of a corporation

sets a new date for determining the right to notice of or to vote

at the adjournment.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

688, Sec. 88, eff. September 1, 2007.

Sec. 22.164. VOTE REQUIRED TO APPROVE FUNDAMENTAL ACTION. (a)

In this section, "fundamental action" means:

(1) an amendment of a certificate of formation, including an

amendment required for the cancellation of an event requiring

winding up in accordance with Section 11.152(b);

(2) a voluntary winding up under Chapter 11;

(3) a revocation of a voluntary decision to wind up under

Section 11.151;

(4) a cancellation of an event requiring winding up under

Section 11.152(a);

(5) a reinstatement under Section 11.202;

(6) a distribution plan under Section 22.305;

(7) a plan of merger under Subchapter F;

(8) a sale of all or substantially all of the assets of a

corporation under Subchapter F;

(9) a plan of conversion under Subchapter F; or

(10) a plan of exchange under Subchapter F.

(b) Except as otherwise provided by Subsection (c) or the

certificate of formation in accordance with Section 22.162, the

vote required for approval of a fundamental action is:

(1) at least two-thirds of the votes that members present in

person or by proxy are entitled to cast at the meeting at which

the action is submitted for a vote, if the corporation has

members with voting rights;

(2) at least two-thirds of the votes of members present at the

meeting at which the action is submitted for a vote, if the

management of the affairs of the corporation is vested in the

corporation's members under Section 22.202; or

(3) the affirmative vote of the majority of the directors in

office, if the corporation has no members or has no members with

voting rights.

fundamental action as a class by the terms of the certificate of

formation or the bylaws, the vote required for the approval of

the fundamental action is the vote required by Subsection (b)(1)

and at least two-thirds of the votes that the members of each

class in person or by proxy are entitled to cast at the meeting

at which the action is submitted for a vote.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

688, Sec. 89, eff. September 1, 2007.

SUBCHAPTER E. MANAGEMENT

Sec. 22.201. MANAGEMENT BY BOARD OF DIRECTORS. Except as

provided by Section 22.202, the affairs of a corporation are

managed by a board of directors. The board of directors may be

designated by any name appropriate to the customs, usages, or

tenets of the corporation.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.202. MANAGEMENT BY MEMBERS. (a) The certificate of

formation of a corporation may vest the management of the affairs

of the corporation in the members of the corporation. If the

corporation has a board of directors, the corporation may limit

the authority of the board to the extent provided by the

certificate of formation or bylaws.

(b) A corporation is considered to have vested the management of

the corporation's affairs in the board of directors of the

corporation in the absence of a provision to the contrary in the

certificate of formation, unless the corporation is a church

organized and operating under a congregational system that:

(1) was incorporated before January 1, 1994; and

(2) has the management of its affairs vested in the

corporation's members.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.203. BOARD MEMBER ELIGIBILITY REQUIREMENTS. A director

of a corporation is not required to be a resident of this state

or a member of the corporation unless the certificate of

formation or a bylaw of the corporation imposes that requirement.

The certificate of formation or bylaws may prescribe other

qualifications for directors.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.204. NUMBER OF DIRECTORS. (a) If the corporation has a

board of directors, a corporation may not have fewer than three

directors. The number of directors shall be set by, or in the

manner provided by, the certificate of formation or bylaws of the

corporation, except that the number of directors on the initial

board of directors must be set by the certificate of formation.

(b) The number of directors may be increased or decreased by

amendment to, or in the manner provided by, the certificate of

formation or bylaws. A decrease in the number of directors may

not shorten the term of an incumbent director.

formation or a bylaw setting the number of directors or providing

for the manner in which the number of directors shall be

determined, the number of directors is the same as the number

constituting the initial board of directors.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.205. DESIGNATION OF INITIAL BOARD OF DIRECTORS. If the

corporation is to be managed by a board of directors, the

certificate of formation of a corporation must state the names of

the members of the initial board of directors of the corporation.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.206. ELECTION OR APPOINTMENT OF BOARD OF DIRECTORS.

Directors other than the initial directors are elected,

appointed, or designated in the manner provided by the

certificate of formation or bylaws. If the method of election,

designation, or appointment is not provided by the certificate of

formation or bylaws, directors other than the initial directors

are elected by the board of directors.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.207. ELECTION AND CONTROL BY CERTAIN ENTITIES. (a) The

board of directors of a religious, charitable, educational, or

eleemosynary corporation may be affiliated with, elected, and

controlled by an incorporated or unincorporated convention,

conference, or association organized under the laws of this or

another state, the membership of which is composed of

representatives, delegates, or messengers from a church or other

religious association.

(b) The board of directors of a corporation may be wholly or

partly elected by one or more associations or corporations

organized under the laws of this or another state if:

(1) the certificate of formation or bylaws of the corporation

provide for that election; and

(2) the corporation has no members with voting rights.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.208. TERM OF OFFICE. (a) Unless the director resigns

or is removed, a director on the initial board of directors of a

corporation holds office until the first annual election of

directors or for the period specified in the certificate of

formation or bylaws of the corporation. Directors other than the

initial directors are elected, appointed, or designated for the

terms provided by the certificate of formation or bylaws.

(b) In the absence of a provision in the certificate of

formation or bylaws setting the term of office for directors, a

director holds office until the next annual election of directors

and until a successor is elected, appointed, or designated and

qualified.

22.211.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Amended by:

Acts 2005, 79th Leg., Ch.

64, Sec. 68, eff. January 1, 2006.

Sec. 22.209. CLASSIFICATION OF DIRECTORS. Directors may be

divided into classes. The terms of office of the several classes

are not required to be uniform.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.210. EX OFFICIO MEMBER OF BOARD. (a) The certificate

of formation or bylaws of a corporation may provide that a person

may be an ex officio member of the board of directors of the

corporation.

(b) A person designated as an ex officio member of the board is

entitled to receive notice of and to attend board meetings.

certificate of formation or bylaws authorize the member to vote.

An ex officio member of the board who is not entitled to vote

does not have the duties or liabilities of a director provided by

this chapter.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.211. REMOVAL OF DIRECTOR. (a) A director of a

corporation may be removed from office under any procedure

provided by the certificate of formation or bylaws of the

corporation.

(b) In the absence of a provision for removal in the certificate

of formation or bylaws, a director may be removed from office,

with or without cause, by the persons entitled to elect,

designate, or appoint the director. If the director was elected

to office, removal requires an affirmative vote equal to the vote

necessary to elect the director.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.2111. RESIGNATION OF DIRECTOR. Except as provided by

the certificate of formation or bylaws, a director of a

corporation may resign at any time by providing written notice to

the corporation.

Added by Acts 2005, 79th Leg., Ch.

64, Sec. 69, eff. January 1, 2006.

Sec. 22.212. VACANCY. (a) Unless otherwise provided by the

certificate of formation or bylaws of the corporation, a vacancy

in the board of directors of a corporation shall be filled by the

affirmative vote of the majority of the remaining directors,

regardless of whether that majority is less than a quorum. A

director elected to fill a vacancy is elected for the unexpired

term of the member's predecessor in office.

(b) A vacancy in the board occurring because of an increase in

the number of directors shall be filled by election at an annual

meeting or at a special meeting of members called for that

purpose. If a corporation has no members or has no members with

the right to vote on the vacancy, the vacancy shall be filled as

provided by the certificate of formation or bylaws.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.213. QUORUM. (a) A quorum for the transaction of

business by the board of directors of a corporation is the lesser

of:

(1) the majority of the number of directors set by the

corporation's bylaws or, in the absence of a bylaw setting the

number of directors, a majority of the number of directors stated

in the corporation's certificate of formation; or

(2) any number, not less than three, set as a quorum by the

certificate of formation or bylaws.

(b) A director present by proxy at a meeting may not be counted

toward a quorum.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.214. ACTION BY DIRECTORS. The act of a majority of the

directors present in person or by proxy at a meeting at which a

quorum is present 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.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.215. VOTING IN PERSON OR BY PROXY. A director of a

corporation may vote in person or, if authorized by the

certificate of formation or bylaws of the corporation, by proxy

executed in writing by the director.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.216. TERM AND REVOCABILITY OF PROXY. (a) A proxy

expires three months after the date the proxy is executed.

(b) A proxy is revocable unless otherwise provided by the proxy

or made irrevocable by law.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.217. NOTICE OF MEETING; WAIVER OF NOTICE. (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. Attendance of a director

at a meeting constitutes a waiver of notice, unless the director

attends a meeting for the express purpose of objecting to the

transaction of any business on the ground that the meeting is not

lawfully called or convened.

at, or the purpose of, a regular or special meeting of the board

of directors is not required to be specified in the notice or

waiver of notice of the meeting.

(d) Notice may be delivered personally or in accordance with

Section 6.051(b).

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.218. MANAGEMENT COMMITTEE. (a) If authorized by the

certificate of formation or bylaws of the corporation, the board

of directors of a corporation, by resolution adopted by the

majority of the directors in office, may designate one or more

committees to have and exercise the authority of the board in the

management of the corporation to the extent provided by:

(1) the resolution;

(2) the certificate of formation; or

(3) the bylaws.

(b) A committee designated under this section must consist of at

least two persons. Except as provided by Subsection (b-1), the

majority of the persons on the committee must be directors. If

provided by the certificate of formation or bylaws, the remaining

persons on the committee are not required to be directors.

(b-1) If a corporation is a religious institution and if

provided by the corporation's certificate of formation or bylaws,

a committee designated under this section may be composed

entirely of persons who are not directors of the corporation.

authority to the committee does not operate to relieve the board

of directors, or an individual director, of any responsibility

imposed on the board or director by law. A committee member who

is not a director has the same responsibility with respect to the

committee as a committee member who is a director.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

1007, Sec. 1, eff. September 1, 2009.

Sec. 22.219. OTHER COMMITTEES. (a) The board of directors of a

corporation, by resolution adopted by the majority of the

directors at a meeting at which a quorum is present, or the

president, if authorized by a similar resolution of the board of

directors or by the certificate of formation or bylaws of the

corporation, may designate and appoint one or more committees

that do not have the authority of the board of directors in the

management of the corporation.

(b) The membership on a committee designated under this section

may be limited to directors.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.220. ACTION WITHOUT MEETING OF DIRECTORS OR COMMITTEE.

(a) The certificate of formation or bylaws of a corporation may

provide that an action required by this chapter to be taken at a

meeting of the corporation's directors or an action that may be

taken at a meeting of the directors or a committee may be taken

without a meeting if a written consent, stating the action to be

taken, is signed by the number of directors or committee members

necessary to take that action at a meeting at which all of the

directors or committee members are present and voting. The

consent must state the date of each director's or committee

member's signature.

(b) Prompt notice of the taking of an action by directors or a

committee without a meeting by less than unanimous written

consent shall be given to each director or committee member who

did not consent in writing to the action.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

688, Sec. 90, eff. September 1, 2007.

Sec. 22.221. 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.

(b) A director is not liable to the corporation, a member, or

another person for an action taken or not taken as a director if

the director acted in compliance with this section. A person

seeking to establish liability of a director must prove that the

director did not act:

(1) in good faith;

(2) with ordinary care; and

(3) in a manner the director reasonably believed to be in the

best interest of the corporation.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.222. RELIGIOUS CORPORATION DIRECTOR'S GOOD FAITH

RELIANCE ON CERTAIN INFORMATION. A director of a religious

corporation, in the discharge of a duty imposed or power

conferred on the director, including a duty imposed or power

conferred as a committee member, may rely in good faith on

information or on an opinion, report, or statement, including a

financial statement or other financial data, concerning the

corporation or another person that was prepared or presented by:

(1) a religious authority; or

(2) a minister, priest, rabbi, or other person whose position or

duties in the religious organization the director believes

justify reliance and confidence and whom the director believes to

be reliable and competent in the matters presented.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

688, Sec. 91, eff. September 1, 2007.

Sec. 22.223. NOT A TRUSTEE. A director of a corporation is not

considered to have the duties of a trustee of a trust with

respect to the corporation or with respect to property held or

administered by the corporation, including property subject to

restrictions imposed by the donor or transferor of the property.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.224. DELEGATION OF INVESTMENT AUTHORITY. (a) The board

of directors of a corporation may:

(1) contract with an advisor who is an investment counsel or a

trust company, bank, investment advisor, or investment manager;

and

(2) confer on that advisor the authority to:

(A) purchase or otherwise acquire a stock, bond, security, or

other investment on behalf of the corporation; and

(B) sell, transfer, or otherwise dispose of an asset or property

of the corporation at a time and for a consideration the advisor

considers appropriate.

(b) The board of directors may:

(1) confer on an advisor described by Subsection (a) other

powers regarding the corporation's investments as the board

considers appropriate; and

(2) authorize the advisor to hold title to an asset or property

of the corporation, in the advisor's own name or in the name of a

nominee, for the benefit of the corporation.

not taken by an advisor under this section if the board acted in

good faith and with ordinary care in selecting the advisor. The

board of directors may remove or replace the advisor, with or

without cause, if the board considers that action appropriate or

necessary.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.225. LOAN TO DIRECTOR PROHIBITED. (a) A corporation

may not make a loan to a director.

(b) The directors of a corporation who vote for or assent to the

making of a loan to a director, and any officer who participates

in making the loan, are jointly and severally liable to the

corporation for the amount of the loan until the loan is repaid.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.226. DIRECTOR LIABILITY FOR CERTAIN DISTRIBUTIONS OF

ASSETS. (a) In addition to any other liability imposed by law

on the directors of a corporation, the directors who vote for or

assent to a distribution of assets other than in payment of the

corporation's debts, when the corporation is insolvent or when

distribution would render the corporation insolvent, or during

the liquidation of the corporation, without the payment and

discharge of or making adequate provisions for any known debt,

obligation, or liability of the corporation, are jointly and

severally liable to the corporation for the value of the assets

distributed, to the extent that the debt, obligation, or

liability is not paid and discharged.

(b) A director is not liable under this section if, in voting

for or assenting to a distribution, the director:

(1) relied in good faith and with ordinary care on information

or an opinion, report, or statement in accordance with Section

3.102;

(2) acting in good faith and with ordinary care, considered the

assets of the corporation to be at least equal to their book

value; or

(3) in determining whether the corporation made adequate

provision for the discharge of all of its liabilities and

obligations as provided in Section 11.053, relied in good faith

and with ordinary care on financial statements of, or other

information concerning, a person who was or became contractually

obligated to discharge some or all of those liabilities or

obligations.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.227. DISSENT TO ACTION. (a) A director of a

corporation who is present at a meeting of the board of directors

at which action is taken on a corporate matter described by

Section 22.226(a) is presumed to have assented to the action

unless:

(1) the director's dissent has been entered in the minutes of

the meeting;

(2) the director has filed a written dissent to the action with

the person acting as the secretary of the meeting before the

meeting is adjourned; or

(3) the director has sent a written dissent by registered mail

to the secretary of the corporation immediately after the meeting

has been adjourned.

(b) The right to dissent under this section does not apply to a

director who voted in favor of the action.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.228. RELIANCE ON WRITTEN OPINION OF ATTORNEY. A

director is not liable under Section 22.226 or 22.227 if, in the

exercise of ordinary care, the director acted in good faith and

in reliance on the written opinion of an attorney for the

corporation.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.229. RIGHT TO CONTRIBUTION. A director against whom a

claim is asserted under Section 22.226 or 22.227 and who is held

liable on the claim is entitled to contribution from persons who

accepted or received the distribution knowing the distribution to

have been made in violation of that section, in proportion to the

amounts received by those persons.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.230. CONTRACTS OR TRANSACTIONS INVOLVING INTERESTED

DIRECTORS, OFFICERS, AND MEMBERS. (a) This section applies only

to a contract or transaction between a corporation and:

(1) one or more of the corporation's directors, officers, or

members; or

(2) an entity or other organization in which one or more of the

corporation's directors, officers, or members:

(A) is a managerial official or a member; or

(B) has a financial interest.

(b) An otherwise valid contract or transaction is valid

notwithstanding that a director, officer, or member of the

corporation is present at or participates in the meeting of the

board of directors, of a committee of the board, or of the

members that authorizes the contract or transaction, or votes to

authorize the contract or transaction, if:

(1) the material facts as to the relationship or interest and as

to the contract or transaction are disclosed to or known by:

(A) the corporation's board of directors, a committee of the

board of directors, or the members, and the board, the committee,

or the members in good faith and with ordinary care authorize the

contract or transaction by the affirmative vote of the majority

of the disinterested directors, committee members or members,

regardless of whether the disinterested directors, committee

members or members constitute a quorum; or

(B) the members entitled to vote on the authorization of the

contract or transaction, and the contract or transaction is

specifically approved in good faith and with ordinary care by a

vote of the members; or

(2) the contract or transaction is fair to the corporation when

the contract or transaction is authorized, approved, or ratified

by the board of directors, a committee of the board of directors,

or the members.

may be included in determining the presence of a quorum at a

meeting of the board, a committee of the board, or members that

authorizes the contract or transaction.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.231. OFFICERS. (a) The officers of a corporation shall

include a president and a secretary and may include one or more

vice presidents, a treasurer, and other officers and assistant

officers as considered necessary. Any two or more offices, other

than the offices of president and secretary, may be held by the

same person.

(b) A properly designated committee may perform the functions of

an officer. A single committee may perform the functions of any

two or more officers, including the functions of president and

secretary.

additional titles as provided by the certificate of formation or

bylaws of the corporation.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.232. ELECTION OR APPOINTMENT OF OFFICERS. (a) An

officer of a corporation shall be elected or appointed at the

time, in the manner, and for the terms prescribed by the

certificate of formation or bylaws of the corporation. The term

of an officer may not exceed three years.

(b) If the certificate of formation or bylaws do not include

provisions for the election or appointment of officers, the

officers shall be elected or appointed annually by the board of

directors or, if the management of the corporation is vested in

the corporation's members, by the members.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.233. APPLICATION TO CHURCH. A corporation that is a

church is not required to have officers as provided by this

subchapter. The duties and responsibilities of the officers may

be vested in the corporation's board of directors or other

designated body in any manner provided for by the certificate of

formation or bylaws of the corporation.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.234. RELIGIOUS CORPORATION OFFICER'S GOOD FAITH RELIANCE

ON CERTAIN INFORMATION. An officer of a religious corporation,

in the discharge of a duty imposed or power conferred on the

officer, may rely in good faith and with ordinary care on

information or on an opinion, report, or statement, including a

financial statement or other financial data, concerning the

corporation or another person that was prepared or presented by:

(1) a religious authority; or

(2) a minister, priest, rabbi, or other person whose position or

duties in the religious organization the officer believes justify

reliance and confidence and whom the officer believes to be

reliable and competent in the matters presented.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

688, Sec. 92, eff. September 1, 2007.

Sec. 22.235. OFFICER LIABILITY. (a) An officer is not liable

to the corporation or any other person for an action taken or

omission made by the officer in the person's capacity as an

officer unless the officer's conduct was not exercised:

(1) in good faith;

(2) with ordinary care; and

(3) in a manner the officer reasonably believes to be in the

best interest of the corporation.

(b) This section shall not affect the liability of the

corporation for an act or omission of the officer.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

SUBCHAPTER F. FUNDAMENTAL BUSINESS TRANSACTIONS

Sec. 22.251. APPROVAL OF MERGER. (a) A domestic corporation

that is a party to a merger under Chapter 10 must approve the

merger by complying with this section.

(b) If the corporation that is a party to the merger has no

members or has no members with voting rights, the plan of merger

must be approved by the vote of directors required by Section

22.164.

a party to the merger is vested in its members under Section

22.202, the plan of merger:

(1) must be submitted to a vote at an annual, regular, or

special meeting of the members; and

(2) must be approved by the members by the vote required by

Section 22.164.

(d) If the corporation that is a party to the merger has members

with voting rights:

(1) the board of directors must adopt a resolution that:

(A) approves the plan of merger; and

(B) directs that the plan be submitted to a vote at an annual or

special meeting of the members having voting rights; and

(2) the members must approve the plan of merger by the vote

required by Section 22.164.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.252. APPROVAL OF SALE OF ALL OR SUBSTANTIALLY ALL OF

ASSETS. (a) A corporation must approve the sale of all or

substantially all of its assets by complying with this section.

(b) If the corporation has no members or has no members with

voting rights, the sale of all or substantially all of the assets

of the corporation must be authorized by the vote of directors

required by Section 22.164.

vested in its members under Section 22.202, a resolution

authorizing a sale of all or substantially all of the assets of

the corporation:

(1) must be submitted to a vote at an annual, regular, or

special meeting of the members; and

(2) must be approved by the members by the vote required by

Section 22.164.

(d) If the corporation has members with voting rights:

(1) the board of directors of the corporation must adopt a

resolution that:

(A) recommends the sale; and

(B) directs that the resolution be submitted to a vote at an

annual or special meeting of the members having voting rights;

and

(2) the members must approve the resolution by the vote required

by Section 22.164.

(e) At the meeting required by Subsection (c) or (d), in

addition to approving the resolution authorizing the sale, the

members may set, or authorize the board of directors to set, the

terms and conditions of the sale and the consideration to be

received by the corporation for the sale by the same vote of

members.

(f) After the members authorize a sale under Subsection (d), the

board of directors may abandon the sale, subject to the rights of

third parties under any contracts relating to the sale, without

further action or approval by members.

(g) Notwithstanding Subsection (d), if a corporation is

insolvent, a sale of all or substantially all of the assets of

the corporation may be authorized on receiving the affirmative

vote of the majority of the directors in office.

(h) The phrase "sale of all or substantially all of the assets"

means the sale, lease, exchange, or other disposition, other than

a pledge, mortgage, deed of trust, or trust indenture unless

otherwise provided by the certificate of formation, of all or

substantially all of the property and assets of a domestic

corporation that is not made in the usual and regular course of

the corporation's activities without regard to whether the

disposition is made with the goodwill of the corporation's

activities. The term does not include a transaction that results

in the corporation directly or indirectly:

(1) continuing to engage in one or more activities; or

(2) applying a portion of the consideration received in

connection with the transaction to the conduct of an activity

that the corporation engages in after the transaction.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.253. MEETING OF MEMBERS; NOTICE. (a) The corporation

must give to each member entitled to vote at a meeting described

by Section 22.251(c) or (d) or Section 22.252(c) or (d) a written

notice stating that the purpose or one of the purposes of the

meeting is to consider the plan of merger or the sale of all or

substantially all of the assets of the corporation. The notice

must be given in the time and manner provided by Chapter 6 and

this chapter for giving notice of a meeting to members.

(b) A vote of members entitled to vote at the meeting shall be

taken on the plan of merger or the resolution authorizing the

sale of all or substantially all of the assets of the

corporation. The members must approve the plan or resolution by

the vote required by Section 22.164.

meeting must contain the plan of merger or a summary of the plan

of merger.

(d) For a corporation the management of the affairs of which is

vested in its members under Section 22.202, the notice of the

meeting is subject to the provisions of the certificate of

formation or bylaws of the corporation.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.254. PLEDGE, MORTGAGE, DEED OF TRUST, OR TRUST

INDENTURE. (a) Except as otherwise provided by Subsection (b)

or by the corporation's certificate of formation:

(1) the board of directors of a corporation may authorize a

pledge, mortgage, deed of trust, or trust indenture; and

(2) an authorization or consent of members is not required for

the validity of the transaction or for any sale under the terms

of the transaction.

(b) If the management of the affairs of a corporation is vested

in the corporation's members under Section 22.202:

(1) the members may authorize a pledge, mortgage, deed of trust,

or trust indenture in the manner provided by Section 22.252(c)

for a sale of all or substantially al

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

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