Texas Codes

Tex. Bus. Orgs. Code § 21.302 (2026)

Authority For Distributions

✓ current as of May 2026

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Sec. 21.302. AUTHORITY FOR DISTRIBUTIONS. (a) The board of directors of a corporation may authorize a distribution and the corporation may make a distribution, subject to Section 21.303.

(b) The board of directors may authorize a distribution by determining the maximum amount that may be distributed and the period during which the maximum amount may be distributed, including by setting a formula to determine the amount to be distributed. The authorization by the board of directors for a distribution may provide that the distribution be paid:

(1) in the amounts and at the times as stated in the authorization; or

(2) in the manner stated in the authorization, which may include a determination or action by any person or persons, including the corporation, if the authorization states the maximum amount that may be distributed under the authorization and the period during which the maximum amount may be distributed.

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

Amended by:

Acts 2017, 85th Leg., R.S., Ch. 75 (S.B. 1518), Sec. 10, eff. September 1, 2017.

Notes of Decisions

Cited in 3 cases (1 in the last 5 years), 2012–2021 · leading case: Argo Data Resource Corp. v. Shagrithaya, 380 S.W.3d 249 (Tex. App. 2012).

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Argo Data Resource Corp. v. Shagrithaya, 380 S.W.3d 249 (Tex. App. 2012). · cites it 2× “Laws 267 , 595 (current version at Tex. Bus. Orgs.Code Ann. § 21.302 (West 2012)).”

Christopher Boehringer & Enginuity Eng'g, Inc. v. Mark A. Konkel, 404 S.W.3d 18 (Tex. App. 2013). “Here in 2009, after Boehringer had promised to make Konkel’s life “miserable,” Boehringer, as president of EEI, withheld the K-l distribution of profits for the 2008 fiscal year. The jury could have reasonably inferred from the evidence about the non-payment of a corporate…”

David A. Skeels v. Jonathan T. Suder, Michael T. Cooke, & Friedman, Suder & Cooke, P.C. (Tex. App. 2021). “A for-profit corporation’s board of directors, or shareholders if acting as the board of directors,8 may authorize a stock redemption and in doing so must determine “the maximum amount that may be distributed.”

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