LIMITATIONS ON DISTRIBUTIONS
Applied in 1 court decision — leading case S & S Food Corp. v. Sherali (In re Sherali) (2013)
Most recently applied in S & S Food Corp. v. Sherali (In re Sherali) (March 2013)
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff
(a) A corporation may not make a distribution that violates the corporation's certificate of formation.
(b) Unless the distribution is made in compliance with Chapter 11, a corporation may not make a distribution:
(1) if the corporation would be insolvent after the distribution; or
(2) that exceeds the distribution limit.
Official source: Texas Constitution and Statutes. Reproduced from public-domain Texas statutes; confirm against the official source for the current text. Not legal advice.