Texas § BO.21.558 - DISMISSAL OF DERIVATIVE PROCEEDING
Full text of Texas The Texas Constitution § BO.21.558 — DISMISSAL OF DERIVATIVE PROCEEDING, with citation guidance and answers to common questions.
§ BO.21.558. DISMISSAL OF DERIVATIVE PROCEEDING
DISMISSAL OF DERIVATIVE PROCEEDING. (a) A court, sitting in equity as the finder of fact, shall dismiss a derivative proceeding on a motion by the corporation if the person or group of persons described by Section 21.554 determines in good faith, after conducting a reasonable inquiry and based on factors the person or group considers appropriate under the circumstances, that continuation of the derivative proceeding is not in the best interests of the corporation. (b) In determining whether the requirements of Subsection (a) have been met, the burden of proof shall be on: (1) the plaintiff shareholder if: (A) the majority of the board of directors consists of independent and disinterested directors at the time the determination is made; (B) the determination is made by a panel of one or more independent and disinterested persons appointed under Section 21.554 (a)(3); or (C) the corporation presents prima facie evidence that demonstrates that the applicable person or persons making the determination under Section 21.554 (a) are independent and disinterested; or (2) the corporation in any other circumstance. 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. 8, eff. September 1, 2019.
Source: official Texas text · Last verified 2026-08-27
Frequently Asked Questions About Texas § BO.21.558
What does The Texas Constitution § BO.21.558 cover?
Section BO.21.558 ("DISMISSAL OF DERIVATIVE PROCEEDING") 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.21.558?
A common citation format is "The Texas Constitution § BO.21.558" (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.21.558 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.