Sec. 21.562. APPLICATION TO FOREIGN CORPORATIONS. (a) In a derivative proceeding brought in the right of a foreign corporation, the matters covered by this subchapter are governed by the laws of the jurisdiction of formation of the foreign corporation, except for Sections 21.555, 21.560, and 21.561, which with respect to foreign corporations are procedural provisions and do not relate to the internal affairs of the foreign corporation, unless applying the laws of the jurisdiction of formation of the foreign corporation requires otherwise with respect to Section 21.555.
(b) In the case of matters relating to a foreign corporation under Section 21.555, a reference to a person or group of persons described by Section 21.554 refers to a person or group entitled under the laws of the jurisdiction of formation of the foreign corporation to make the determination described by Section 21.554(a). The standard of review of a determination made by the person or group shall be governed by the laws of the jurisdiction of formation of the foreign corporation.
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. 11, eff. September 1, 2019.
Acts 2025, 89th Leg., R.S., Ch. 21 (S.B. 29), Sec. 16, eff. May 14, 2025.
Acts 2025, 89th Leg., R.S., Ch. 199 (S.B. 2411), Sec. 29, eff. September 1, 2025.
Notes of Decisions
Cited in
11
cases, 2008–2020 · leading case:
Lapiner v. Maimon, 429 S.W.3d 816 (Tex. App.—Houston [14th Dist.] 2014).
Lapiner v. Maimon, 429 S.W.3d 816 (Tex. App.—Houston [14th Dist.] 2014).
· cites it 4× “See Tex. Bus. Orgs.Code Ann. § 21.562; Arkoma Basin Exploration Co.”
In re Crown Castle Int'l Corp., 247 S.W.3d 349 (Tex. App.—Houston [14th Dist.] 2008).
· cites it 2× “562 of the Business Organizations Code, which provides that the law of the state of incorporation governs the derivative proceeding, controls only substantive matters, and specifically excludes “procedural issues not relating to the internal affairs of the foreign corporation.”
Richardson v. Newman, 439 S.W.3d 538 (Tex. App.—Houston [1st Dist.] 2014).
· cites it 2× “See Tex. Bus. Orgs. Code Ann. § 21.562 (a) (West 2012) (“In a derivative proceeding brought in the right of a foreign corporation, the matters covered by this subchapter are governed by the laws of the jurisdiction of incorporation of the foreign corporation .”
Yuval Lapiner v. Jackob Maimon, Max Pridgeon & Michelle R. Cinnamon FloresHaim Tsuff & Goodrich Global Ltd., Isramco, Inc., Jeffrey Goldstein, & Theodore Steinberg, No. 14-12-00158-CV (Tex. App.—Houston [14th Dist.] Apr. 22, 2014).
· cites it 3× “30 Thus, even if, under Delaware law, preservation of error is required to avoid waiver of Lapiner’s lack of standing, the lack of preservation would not matter because Delaware law does not apply to this issue.”
City of Warren Police & Fire Ret. Sys. v. Tenet Healthcare Corp., No. 05-19-00260-CV (Tex. App.—Dallas Sept. 28, 2020).
“See TEX. BUS. ORGS. CODE § 21.562(a) (in derivative proceeding brought in right of foreign corporation, requirement that shareholder make written demand is governed by law of jurisdiction where foreign corporation is incorporated).”
Margaret C. Richardson v. Steven L. Newman, No. 01-13-00757-CV (Tex. App.—Houston [1st Dist.] July 24, 2014).
“By way of contrast, although they are otherwise scattered across the globe, Transocean shareholders who opted to purchase stock in a Swiss company on the New York or Swiss exchange where it is traded, could be said to have a special relationship with courts in those…”
Tex. Bus. Orgs. Code § 21.562(a): 7 cases
In re Crown Castle Int'l Corp., 247 S.W.3d 349 (Tex. App.—Houston [14th Dist.] 2008).
“562 of the Business Organizations Code, which provides that the law of the state of incorporation governs the derivative proceeding, controls only substantive matters, and specifically excludes “procedural issues not relating to the internal affairs of the foreign corporation.”
Richardson v. Newman, 439 S.W.3d 538 (Tex. App.—Houston [1st Dist.] 2014).
“See Tex. Bus. Orgs. Code Ann. § 21.562 (a) (West 2012) (“In a derivative proceeding brought in the right of a foreign corporation, the matters covered by this subchapter are governed by the laws of the jurisdiction of incorporation of the foreign corporation .”
Lapiner v. Maimon, 429 S.W.3d 816 (Tex. App.—Houston [14th Dist.] 2014).
“See Tex. Bus. Orgs.Code Ann. § 21.562; Arkoma Basin Exploration Co.”
City of Warren Police & Fire Ret. Sys. v. Tenet Healthcare Corp., No. 05-19-00260-CV (Tex. App.—Dallas Sept. 28, 2020).
“See TEX. BUS. ORGS. CODE § 21.562(a) (in derivative proceeding brought in right of foreign corporation, requirement that shareholder make written demand is governed by law of jurisdiction where foreign corporation is incorporated).”
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