Texas § BO.21.170 - CONSIDERATION FOR RIGHTS, OPTIONS, AND CONVERTIBLE INDEBTEDNESS
Full text of Texas The Texas Constitution § BO.21.170 — CONSIDERATION FOR RIGHTS, OPTIONS, AND CONVERTIBLE INDEBTEDNESS, with citation guidance and answers to common questions.
§ BO.21.170. CONSIDERATION FOR RIGHTS, OPTIONS, AND CONVERTIBLE INDEBTEDNESS
CONSIDERATION FOR RIGHTS, OPTIONS, AND CONVERTIBLE INDEBTEDNESS. (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 . Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Source: official Texas text · Last verified 2026-08-27
Frequently Asked Questions About Texas § BO.21.170
What does The Texas Constitution § BO.21.170 cover?
Section BO.21.170 ("CONSIDERATION FOR RIGHTS, OPTIONS, AND CONVERTIBLE INDEBTEDNESS") is part of the The Texas Constitution, the codified statutory law of Texas. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite Texas § BO.21.170?
A common citation format is "The Texas Constitution § BO.21.170" (Texas). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of Texas law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the Texas official source linked on this page or consult a licensed Texas attorney.
How does Texas § BO.21.170 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in Texas can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in Texas.