Texas § BO.21.053 - ADOPTION OF AMENDMENT BY BOARD OF DIRECTORS

§ BO.21.053. ADOPTION OF AMENDMENT BY BOARD OF DIRECTORS

ADOPTION OF AMENDMENT BY BOARD OF DIRECTORS. (a) If a corporation does not have any issued and outstanding shares, or in the case of an amendment under Subsection (b) or (c), the board of directors may adopt a proposed amendment to the corporation's certificate of formation by resolution without shareholder approval. (b) Notwithstanding Section 21.054 , the board of directors may adopt a proposed amendment without shareholder approval in the manner provided by Section 21.155 if the amendment to the corporation's certificate of formation relates to a series of shares established by the board under authority granted to the board in the certificate of formation as provided by Section 21.155 . (c) Notwithstanding Section 21.054 and except as otherwise provided by the certificate of formation, the board of directors of a corporation that has outstanding shares: (1) may, without shareholder approval, adopt an amendment to the corporation's certificate of formation to: (A) change the word or abbreviation in its corporate name as required by Section 5.054 (a) to be a different word or abbreviation required by that section; (B) omit any provision that specifies the name and address of each organizer or director; or (C) omit any provisions that were necessary to effect a change, exchange, reclassification, subdivision, combination, or cancellation of shares, if the change, exchange, reclassification, subdivision, combination, or cancellation has become effective; and (2) if the corporation has only one class of outstanding stock that is not divided into series and in which no change is made in any par value of shares of that class, may, without shareholder approval, adopt an amendment to the corporation's certificate of formation to: (A) reclassify by subdividing the issued shares of the class into a greater number of issued shares of the class; and (B) if the reclassification is primarily for the purpose of maintaining the listing eligibility of the class on any applicable national securities exchange, reclassify by combining the issued shares of the class into a lesser number of issued shares of the class. (d) An amendment described by Subsection (c)(2)(A) may also increase the number of authorized shares of the class up to an amount determined by multiplying the existing number of authorized shares of the class by the same multiple by which the issued shares of the class are subdivided in the reclassification and rounding up any resulting fractional number of shares to a whole number of shares. (e) An amendment described by Subsection (c)(2)(B) may also decrease the number of authorized shares of the class to an amount determined by dividing the existing number of authorized shares of the class by the same multiple by which the issued shares of the class are combined in the reclassification and rounding up any resulting fractional number of shares to a whole number of shares. (f) When a reclassification of issued shares: (1) with par value is made by a corporation under Subsection (c)(2)(A), an amount of surplus designated by the corporation's board of directors that is not less than the aggregate par value of the shares issued as a result of the reclassification shall be transferred to stated capital; and (2) without par value is made by a corporation under Subsection (c)(2)(A), an amount of surplus equal to an aggregate value with respect to the shares issued as a result of the reclassification, as set by the board of directors when the reclassification is authorized, shall be transferred to stated capital. (g) A corporation may not effect a reclassification under Subsection (c)(2)(A) if the surplus of the corporation is less than the amount required by Subsection (f)(1) or (f)(2), as applicable, to be transferred to stated capital at the time the reclassification becomes effective. Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006. Amended by: Acts 2005, 79th Leg., Ch. 64 (H.B. 1319 ), Sec. 44, eff. January 1, 2006. Acts 2015, 84th Leg., R.S., Ch. 32 (S.B. 860 ), Sec. 21, eff. September 1, 2015. Acts 2025, 89th Leg., R.S., Ch. 199 (S.B. 2411 ), Sec. 23, eff. September 1, 2025.