Tex. Codes » Business Organizations Code · TITLE 1. GENERAL PROVISIONS · CHAPTER 11. WINDING UP AND TERMINATION OF DOMESTIC ENTITY
Texas Codes

Tex. Bus. Orgs. Code § 11.053 (2026)

Property Applied To Discharge Liabilities And Obligations

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Sec. 11.053. PROPERTY APPLIED TO DISCHARGE LIABILITIES AND OBLIGATIONS. (a) Except as provided by Subsection (b) and the title of this code governing the domestic entity, a domestic entity in the process of winding up shall apply and distribute its property to discharge, or make adequate provision for the discharge of, all of the domestic entity's liabilities and obligations.

(b) Except as provided by the title of this code governing the domestic entity, if the property of a domestic entity is not sufficient to discharge all of the domestic entity's liabilities and obligations, the domestic entity shall:

(1) apply its property, to the extent possible, to the just and equitable discharge of its liabilities and obligations, including liabilities and obligations owed to owners or members, other than for distributions; or

(2) make adequate provision for the application of the property described by Subdivision (1).

(c) Except as provided by the title of this code governing the domestic entity, after a domestic entity has discharged, or made adequate provision for the discharge of, all of its liabilities and obligations, the domestic entity shall distribute the remainder of its property, in cash or in kind, to the domestic entity's owners according to their respective rights and interests.

(d) A domestic entity may continue its business wholly or partly, including delaying the disposition of property of the domestic entity, for the limited period necessary to avoid unreasonable loss of the entity's property or business.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Notes of Decisions
Cited in 7 cases (3 in the last 5 years), 2012–2026 · leading case: Endsley Elec., Inc. v. Altech, Inc., 378 S.W.3d 15 (Tex. App.—Texarkana 2012).
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Endsley Elec., Inc. v. Altech, Inc., 378 S.W.3d 15 (Tex. App.—Texarkana 2012). “10 Tex. Bus. Orgs.Code Ann. §§ 11.053, 11.356(a)(1), (c)(l)-(2) (West Supp.”
Phillip D. Greer v. Sarah Najera & Heaven Scent Cleaning by Sarah, LLC, No. 03-24-00551-CV (Tex. App.—Austin June 12, 2026). · cites it 2× “Tex. Bus. Orgs. Code § 11.053. That is, the LLC must 10 first apply its property to discharge all its liabilities and obligations.”
Dennis W. Berry Marvin G. Berry Bay, Inc. v. Kenneth L. Berry, No. 13-18-00215-CV (Tex. App.—Corpus Christi–Edinburg Dec. 5, 2019). “3 See TEX. BUS. ORG. CODE ANN. § 11.053. 6”
Two Wheels Props., LLC., No. 20-35372 (Bankr. S.D. Tex. Dec. 30, 2020). “Thus, this case will be dis- 26 See TEX. BUS. ORGS. CODE § 11.356. 27 See TEX.”
Dragan Boroja v. Alexander Le Roux, No. 03-23-00789-CV (Tex. App.—Austin Mar. 12, 2025). “Any related misrepresentations or fraudulent concealment of material information do not mean that Boroja’s claims did not accrue by August 29, 2017, because of his admitted knowledge of the basic facts giving rise to his alleged injuries and claims: as a member of ALR, he would…”
Kapitus Servicing, Inc. v. Alberto Cipriano Monreal, No. 24-05013 (Bankr. W.D. Tex. June 18, 2026). “” See TEX. BUS. ORGS. CODE § 11.053(a).5 Only after discharging all liabilities and obligations could Bison Inc.”
In re 21st Century Grp., LLC, No. 06-12-00064-CV (Tex. App.—Texarkana Aug. 7, 2012). “10 TEX. BUS. ORGS. CODE ANN. §§ 11.053, 11.356(a)(1), (c)(1)–(2) (West Supp.”
Tex. Bus. Orgs. Code § 11.053(a): 1 case
Kapitus Servicing, Inc. v. Alberto Cipriano Monreal, No. 24-05013 (Bankr. W.D. Tex. June 18, 2026). “” See TEX. BUS. ORGS. CODE § 11.053(a).5 Only after discharging all liabilities and obligations could Bison Inc.”
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