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Tex. Bus. Orgs. Code § 21.311

LIMITATIONS ON SHARE DIVIDENDS

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

A corporation may not pay a share dividend in authorized but unissued shares of any class if:

(1) the surplus of the corporation is less than the amount required by Section 21.313 to be transferred to stated capital at the time the share dividend is made; or

(2) the share dividend will be made to a holder of shares of any other class or series, unless:

(A) the corporation's certificate of formation provides for the dividend; or

(B) the share dividend is authorized by the holders of at least a majority of the outstanding shares of the class or series in which the share dividend is to be made.

Official source: Texas Constitution and Statutes. Reproduced from public-domain Texas statutes; confirm against the official source for the current text. Not legal advice.