REAL ESTATE INVESTMENT TRUSTS - SHARES

TEXAS BUSINESS ORGANIZATIONS CODE

§ 200.101. NUMBER.

A real estate investment trust may issue the number of shares stated in the real estate investment trust's certificate of formation.

§ 200.102. CLASSIFICATION OF SHARES.

A real estate investment trust may provide in the real estate investment trust's certificate of formation:

(1) that a specified class of shares is preferred over another class of shares as to its distributive share of the assets on voluntary or involuntary liquidation of the real estate investment trust;

(2) the amount of a preference described by Subdivision (1);

(3) that a specified class of shares may be redeemed at the option of the real estate investment trust or of the holders of the shares;

(4) the terms and conditions of a redemption of shares described by Subdivision (3), including the time and price of redemption;

(5) that a specified class of shares may be converted into shares of one or more other classes;

(6) the terms and conditions of a conversion described by Subdivision (5);

(7) that a holder of a specified security issued or to be issued by the real estate investment trust has voting or other rights authorized by law; and

(8) for other preferences, rights, restrictions, including restrictions on transferability, and qualifications consistent with law.

§ 200.103. CLASSES OF SHARES ESTABLISHED BY TRUST MANAGERS.

(a) A real estate investment trust may provide in the real estate investment trust's certificate of formation that the trust managers may classify or reclassify any unissued shares by setting or changing the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, or terms or conditions of redemption of the shares.

(b) Before issuing shares, the trust managers who perform as authorized by the certificate of formation an action described by Subsection (a) must file with the county clerk of the county of the principal place of business of the real estate investment trust a statement of designation that contains:

(1) a description of the shares, including the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption, as set or changed by the trust managers; and

(2) a statement that the shares have been classified or reclassified by the trust managers as authorized by the certificate of formation.

§ 200.104. ISSUANCE OF SHARES.

(a) A real estate investment trust may issue shares for consideration if authorized by the trust managers.

(b) Shares may not be issued until the consideration, determined in accordance with this subchapter, has been paid to the real estate investment trust or to another entity of which all of the outstanding ownership interests are directly or indirectly owned by the real estate investment trust. When the consideration is paid:

(1) the shares are considered to be issued;

(2) the shareholder entitled to receive the shares is a shareholder with respect to the shares; and

(3) the shares are considered fully paid and nonassessable.

§ 200.105. TYPES OF CONSIDERATION FOR ISSUANCE OF SHARES.

Shares with or without par value may be issued by a real estate investment trust for the following types of consideration:

(1) a tangible or intangible benefit to the real estate investment trust;

(2) cash;

(3) a promissory note;

(4) services performed or a contract for services to be performed;

(5) a security of the real estate investment trust or any other organization; and

(6) any other property of any kind or nature.

§ 200.106. DETERMINATION OF CONSIDERATION FOR SHARES.

Consideration to be received by a real estate investment trust for shares shall be determined by the trust managers.

§ 200.107. AMOUNT OF CONSIDERATION FOR ISSUANCE OF SHARES WITH PAR VALUE.

Consideration to be received by a real estate investment trust for the issuance of shares with par value may not be less than the par value of the shares.

§ 200.108. VALUE OF CONSIDERATION.

In the absence of fraud in the transaction, the judgment of the trust managers is conclusive in determining the value of the consideration received for the shares.

§ 200.109. LIABILITY OF ASSIGNEE OR TRANSFEREE.

An assignee or transferee of certificated shares, uncertificated shares, or a subscription for shares in good faith and without knowledge that full consideration for the shares or subscription has not been paid may not be held personally liable to the real estate investment trust or a creditor of the real estate investment trust for an unpaid portion of the consideration.

§ 200.110. SUBSCRIPTIONS.

(a) A real estate investment trust may accept a subscription by notifying the subscriber in writing.

(b) A subscription to purchase shares in a real estate investment trust that is in the process of being formed is irrevocable for six months if the subscription is in writing and signed by the subscriber unless the subscription provides for a longer or shorter period or all of the other subscribers agree to the revocation of the subscription.

(c) A written subscription entered into after the real estate investment trust is formed is a contract between the subscriber and the real estate investment trust.

§ 200.111. PREFORMATION SUBSCRIPTION.

(a) A real estate investment trust may determine the payment terms of a preformation subscription unless the payment terms are specified by the subscription. The payment terms may authorize payment in full on acceptance or by installments.

(b) Unless the subscription provides otherwise, a real estate investment trust shall make calls placed to all subscribers of similar interests for payment on preformation subscriptions uniform as far as practicable.

(c) After the real estate investment trust is formed, if a subscriber fails to pay any installment or call when due, the real estate investment trust may:

(1) collect in the same manner as any other debt the amount due on any unpaid preformation subscription; or

(2) forfeit the subscription if the installment or call remains unpaid for 20 days after written notice to the subscriber.

(d) Although the forfeiture of a subscription terminates all the rights and obligations of the subscriber, the real estate investment trust may retain any amount previously paid on the subscription.

§ 200.112. COMMITMENT IN CONNECTION WITH PURCHASE OF SHARES.

(a) A person who contemplates the acquisition of shares in a real estate investment trust may commit to act in a specified manner with respect to the shares after the acquisition, including the voting of the shares or the retention or disposition of the shares. To be binding, the commitment must be in writing and be signed by the person acquiring the shares.

(b) A written commitment entered into under Subsection (a) is a contract between the shareholder and the real estate investment trust.

§ 200.113. SUPPLEMENTAL REQUIRED RECORDS.

In addition to the books and records required to be kept under § 3.151, a real estate investment trust must keep at its principal office or place of business, or at the office of its transfer agent or registrar, a record of the number of shares held by each shareholder.

 

Contact Information

Mailing Address

Chowins Law Firm, PLLC
1011 Surrey Lane #200
Flower Mound, TX 75022

Telephone

(469) 630-2550

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