Voting

Voting is the mechanism by which shareholders or directors of a Texas corporation make decisions binding on the corporation. Shareholder voting governs election of directors and certain fundamental corporate transactions; director voting governs ordinary management decisions.

Default voting rules

Election of directors (§ 21.359): the candidates receiving the highest number of votes cast by shareholders entitled to vote in the election are elected, up to the number of directors to be elected (plurality voting).

Other shareholder matters (§ 21.363): the affirmative vote of the holders of a majority of the shares entitled to vote on, and that voted for, against, or expressly abstained with respect to, the matter at a meeting at which a quorum is present is the act of the shareholders, unless a different threshold is required by the certificate, the bylaws, or the TBOC.

Fundamental actions (§ 21.364): certificate amendments, a voluntary winding up and related winding-up actions require the affirmative vote of two-thirds of the outstanding shares entitled to vote, unless the certificate provides for a different threshold under § 21.365 (which may be as low as a majority). Mergers, conversions, interest exchanges and sales of all or substantially all assets are fundamental business transactions, which require the same default two-thirds vote under § 21.457.

Number of votes

Each outstanding share is entitled to one vote on each matter submitted to a vote at a shareholders' meeting unless the certificate provides otherwise. § 21.366.

Class voting and SB 29

Under § 21.365(b)(2), as amended by SB 29 effective May 14, 2025, the certificate of formation may provide that all classes and series vote as a single class, without separate class or series voting, on any matter, including a fundamental action or fundamental business transaction. See also § 21.364(e-1). See Class Voting.