Texas § 21.419 PRESUMPTIONS FOR DIRECTORS AND OFFICERS OF CERTAIN CORPORATIONS.

Texas Statutes

§ 21.419 — PRESUMPTIONS FOR DIRECTORS AND OFFICERS OF CERTAIN CORPORATIONS.

Texas § 21.419

Code BOBusiness Organizations Code

This text of Texas § 21.419 (PRESUMPTIONS FOR DIRECTORS AND OFFICERS OF CERTAIN CORPORATIONS.) is published on Counsel Stack Legal Research, covering Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Tex. Business Organizations Code Code Ann. § 21.419 (2026).

Text

Sec. 21.419. PRESUMPTIONS FOR DIRECTORS AND OFFICERS OF CERTAIN CORPORATIONS.

(a)This section applies only to a corporation that has:

(1)a class or series of voting shares listed on a national securities exchange; or

(2)included in its governing documents a statement affirmatively electing to be governed by this section.

(b)This section sets out certain presumptions concerning compliance by directors and officers with their duties to a domestic corporation, including the duty of care and duty of loyalty as those duties pertain to transactions with interested persons.

(c)In taking or declining to take any action on any matters of a corporation's business, a director or officer is presumed to act:

(1)in good faith;

(2)on an informed basis;

(3)in furtherance of the interests of the co

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Sec. 21.419. PRESUMPTIONS FOR DIRECTORS AND OFFICERS OF CERTAIN CORPORATIONS. (a) This section applies only to a corporation that has:
(1) a class or series of voting shares listed on a national securities exchange; or
(2) included in its governing documents a statement affirmatively electing to be governed by this section.
(b) This section sets out certain presumptions concerning compliance by directors and officers with their duties to a domestic corporation, including the duty of care and duty of loyalty as those duties pertain to transactions with interested persons.
(c) In taking or declining to take any action on any matters of a corporation's business, a director or officer is presumed to act:
(1) in good faith;
(2) on an informed basis;
(3) in furtherance of the interests of the corporation; and
(4) in obedience to the law and the corporation's governing documents.
(d) Neither a corporation nor any of the corporation's shareholders has a cause of action against a director or officer of the corporation as a result of any act or omission in the person's capacity as a director or officer unless:
(1) the claimant rebuts one or more of the presumptions established by Subsection (c); and
(2) it is proven by the claimant that:
(A) the director's or officer's act or omission constituted a breach of one or more of the person's duties as a director or officer; and
(B) the breach involved fraud, intentional misconduct, an ultra vires act, or a knowing violation of law.
(e) The presumptions established by this section:
(1) are in addition to any legal presumption arising under common law or this code, in favor of any managerial official of a corporation to which this section applies; and
(2) do not abrogate, preempt, or lessen any other defense, presumption, immunity, or privilege under other constitutional, statutory, case, or common law or rule provisions, in favor of any managerial official of any domestic entity, including any corporation to which this section does not apply.
(f) In alleging fraud, intentional misconduct, an ultra vires act, or a knowing violation of the law under Subsection (d)(2)(B), a party must state with particularity the circumstances constituting the fraud, intentional misconduct, ultra vires act, or knowing violation of law.
(g) This section does not limit the effectiveness or applicability of a provision contained in the certificate of formation or similar instrument of a corporation limiting monetary liability of a governing person.
SUBCHAPTER J. FUNDAMENTAL BUSINESS TRANSACTIONS