The Texas Business Organizations Code (BOC) governs the formation and operation of nonprofit corporations in Texas. Specifically, Chapter 22 of the BOC addresses public benefit, mutual benefit, and religious corporations. When a nonprofit corporation in Texas wishes to dissolve, it must follow a statutory process to wind up its affairs. This process typically involves adopting a resolution of dissolution, filing a Certificate of Dissolution with the Texas Secretary of State, and then distributing assets. The distribution of assets is a critical step, particularly for public benefit corporations, which are organized for charitable or public purposes. Texas law mandates that upon dissolution, any remaining assets must be distributed to one or more organizations that are themselves tax-exempt under Section 501(c)(3) of the Internal Revenue Code and that operate for purposes similar to those of the dissolving corporation. This ensures that the charitable assets continue to serve the public good. Failure to adhere to this distribution requirement can lead to legal challenges and potential reversion of assets to the state. The scenario presented involves a Texas nonprofit intending to dissolve and distribute its remaining funds to a for-profit entity that provides services to the community. This action is contrary to the statutory requirements for asset distribution upon dissolution of a nonprofit corporation, especially one likely organized as a public benefit entity. The BOC requires distribution to other 501(c)(3) organizations with similar purposes. Distributing to a for-profit entity, regardless of its community service, violates this principle and the statutory mandate. Therefore, the proposed distribution is impermissible under Texas law.

The Texas Business Organizations Code (BOC) governs the formation and operation of nonprofit corporations in Texas. Specifically, Chapter 22 of the BOC outlines the requirements for establishing and maintaining a nonprofit entity. When a nonprofit corporation in Texas wishes to amend its articles of incorporation, it must follow a specific procedural pathway. This process generally involves a resolution by the board of directors, followed by a vote of the members, if the articles or bylaws provide for member voting on such matters. The amendment then needs to be filed with the Texas Secretary of State. The question asks about the initial step for amending the articles of incorporation. While member approval is often required, the foundational step for initiating any amendment process, especially one that alters the fundamental governing document of the corporation, is a formal decision by the governing body, which is the board of directors. The board must first approve the proposed changes before they are presented to members or filed. Therefore, the board of directors adopting a resolution is the prerequisite for any subsequent actions. The other options, while potentially part of the overall amendment process, are not the initial formal step. Obtaining a tax-exempt determination from the IRS is a separate process related to federal tax status, not the amendment of state corporate documents. Filing the amended articles with the Secretary of State is the final step after approval. A unanimous vote of all incorporators is typically relevant during the initial formation stage, not for amendments to already established corporations, unless specifically stipulated in the original articles or bylaws, which is not the general rule for amendments.

The Texas Business Organizations Code (BOC) governs the formation and operation of nonprofit corporations. Specifically, Chapter 22 of the BOC outlines the requirements for incorporating a nonprofit organization in Texas. A critical aspect of this is the filing of a Certificate of Formation with the Texas Secretary of State. This certificate must contain specific information, including the name of the nonprofit, its purpose, the names and addresses of its initial directors, and a registered agent for service of process. Once filed and approved, the Certificate of Formation establishes the legal existence of the nonprofit corporation. The subsequent adoption of bylaws and the election of directors are internal governance matters that follow the initial incorporation. While a registered agent is crucial for legal service, the designation of a registered office is intrinsically tied to the registered agent’s role and is a required element within the Certificate of Formation itself. Therefore, the filing of the Certificate of Formation is the foundational legal act that brings a nonprofit corporation into existence under Texas law.

The Texas Business Organizations Code (BOC) governs the formation and operation of nonprofit corporations in Texas. Specifically, Chapter 22 of the BOC addresses various aspects of nonprofit entities. When a nonprofit corporation in Texas wishes to amend its articles of incorporation, the process is outlined within this chapter. The BOC requires that such amendments be adopted by the board of directors and, in most cases, by the members of the corporation, unless the articles of incorporation or bylaws specify a different voting threshold for amendments, provided it is still reasonable. The formalization of this amendment process involves filing a Certificate of Amendment with the Texas Secretary of State. This certificate must contain specific information, including the name of the corporation, the date the articles were filed, the specific amendment being made, and confirmation that the amendment was approved in accordance with the BOC and the corporation’s governing documents. The question hinges on understanding the statutory requirements for effectuating a change to the foundational document of a Texas nonprofit. The Texas Business Organizations Code, Section 22.053, details the procedure for amendment, emphasizing the need for board and, typically, member approval. The filing of a Certificate of Amendment is the ministerial act that makes the amendment legally effective.

The Texas Business Organizations Code (BOC) governs nonprofit corporations. Specifically, Chapter 22 of the BOC addresses nonprofit corporations. Under Section 22.051 of the Texas BOC, a nonprofit corporation has the power to sue and be sued. This is a fundamental attribute of any legal entity, allowing it to participate in legal proceedings. This power is not contingent upon the corporation obtaining a Certificate of Authority to transact business in Texas if it is already a Texas nonprofit corporation formed under the BOC. The Certificate of Authority is typically required for foreign (out-of-state) entities seeking to conduct business in Texas, not for domestic entities asserting their legal rights. Therefore, a Texas nonprofit corporation, by its very nature as a legal entity formed under Texas law, possesses the inherent power to initiate or defend legal actions within Texas courts without needing an additional certificate for this specific purpose. The ability to engage in litigation is a core component of corporate personhood and the capacity to operate as a distinct legal entity.

The scenario involves a Texas nonprofit corporation, “Lone Star Conservation Alliance” (LSCA), which was formed for exclusively charitable and educational purposes related to wildlife habitat preservation. The organization’s bylaws permit a director to hold office until their successor is duly elected and qualified. At the most recent annual meeting, a quorum was present, but the election of directors resulted in a tie vote for one of the open board positions. According to Texas Business Organizations Code Section 22.231, if a director’s term has expired, the director continues to serve until their successor is elected or qualified. In the case of a tie vote for a directorship where no successor can be determined, the incumbent director, whose term has expired, continues to hold the position. This ensures continuity on the board and prevents a vacancy from arising solely due to an unresolved election outcome, provided the incumbent is willing to continue serving. The question tests the understanding of how to handle unresolved director elections in Texas nonprofits, specifically when a tie vote occurs. The applicable Texas law addresses this by allowing the incumbent to continue serving until a successor is properly elected and qualified, thereby maintaining board stability.

The Texas Business Organizations Code (BOC) governs nonprofit corporations in Texas. Specifically, Chapter 22 of the BOC addresses public and nonprofit corporations. When a nonprofit corporation in Texas wishes to amend its articles of incorporation to change its purpose, it must follow specific procedures. These procedures typically involve a resolution by the board of directors and approval by the members, if the articles provide for member voting on such matters. Section 22.052 of the Texas BOC outlines the process for amending articles of incorporation. The amendment must be adopted by the board of directors and, if the articles require member approval for fundamental changes, by the members. The question posits a scenario where the articles of incorporation of “Lone Star Heritage Foundation,” a Texas nonprofit, do not explicitly grant members the right to vote on amendments to the articles. In such a case, the Texas BOC generally presumes that the board of directors has the authority to approve amendments, unless the articles themselves specify otherwise or the amendment affects member rights in a way that implicitly requires their consent. However, for fundamental changes like altering the corporation’s stated purpose, even if not explicitly required by the articles, it is a best practice and often legally prudent to seek member input or approval to ensure broad stakeholder buy-in and to avoid potential future disputes or challenges to the amendment’s validity, especially if the change significantly alters the organization’s mission. The question asks about the *most* appropriate action. While board approval is the statutory minimum if member voting is not specified, a more robust approach that aligns with nonprofit governance principles and can prevent future issues involves presenting the proposed amendment to the members for their consideration and vote, even if not strictly mandated by the current articles. This demonstrates good stewardship and transparency. Therefore, seeking member approval, in addition to board approval, is the most advisable course of action to ensure the amendment is well-received and legally sound in the long term, reflecting a commitment to member engagement in significant organizational changes.

The scenario involves a Texas nonprofit corporation, “Texan Heritage Preservation Society,” which has received a substantial bequest from a deceased benefactor. The bequest is designated for the acquisition and restoration of a historic property located in Austin, Texas. The organization’s board of directors is considering how to best manage these funds to fulfill the donor’s intent while ensuring the long-term sustainability of the preservation efforts. Under Texas law, specifically the Texas Business Organizations Code (BOC), specifically Chapter 22, which governs nonprofit corporations, a nonprofit corporation has the power to accept gifts and donations. When a gift is restricted for a specific purpose, such as the acquisition and restoration of a particular property, the nonprofit corporation has a fiduciary duty to use those funds in accordance with the donor’s intent. This duty is often referred to as the duty of loyalty and the duty to adhere to the organization’s stated purpose. If the board were to deviate significantly from the designated purpose, it could potentially breach its fiduciary duties. The Texas Property Code, particularly provisions related to trusts and endowments, might also be relevant if the bequest was structured as a perpetual endowment, though the question implies a direct bequest for a specific project. However, the primary governing framework for the nonprofit’s actions concerning the bequest and its use for the stated purpose falls under the BOC. The question asks about the primary legal constraint on the board’s use of these funds. The most direct and overarching constraint is the obligation to honor the donor’s specified purpose for the bequest, as this is fundamental to the nature of restricted gifts and the nonprofit’s mission alignment. While fundraising regulations or general corporate governance principles are relevant to nonprofit operations, they are not the *primary* legal constraint specifically tied to the use of a restricted bequest for a particular project. Similarly, while tax-exempt status is crucial, it is a consequence of adhering to purpose, not the direct constraint on how a specific fund must be used. The concept of cy pres, while applicable to charitable trusts, is a judicial doctrine for modifying a trust’s purpose when it becomes impossible or impracticable, and is not the primary constraint on the board’s initial use of the funds as intended by the donor. Therefore, the most accurate answer focuses on the duty to adhere to the donor’s stated purpose for the restricted gift.

In Texas, a nonprofit corporation can generally acquire and hold real property. The Texas Business Organizations Code (BOC) addresses the powers of nonprofit corporations, including property ownership. Section 222.002 of the BOC grants a nonprofit corporation the power to acquire, own, hold, use, and otherwise deal with any property, real or personal, or any interest therein, wherever situated. This power is not contingent on the property being directly used for the corporation’s charitable purpose, but rather on the property being acquired and held in furtherance of its purposes. The key is that the acquisition and holding must be consistent with the nonprofit’s stated mission and not for purely private gain or speculation unrelated to its charitable objectives. If a nonprofit corporation were to acquire property solely for speculative investment with no connection to its mission, it could potentially raise questions regarding its adherence to nonprofit status and its fiduciary duties. However, the statute broadly permits property ownership as a means to support its activities. The question asks about the legal capacity of a Texas nonprofit to hold property, and the BOC provides this authority.

The Texas Business Organizations Code (BOC) governs nonprofit corporations. Section 222.051 of the BOC outlines the requirements for a nonprofit corporation to dissolve voluntarily. Dissolution requires a resolution adopted by the board of directors, followed by a vote of the members or shareholders, depending on the corporation’s structure. For corporations with members, a majority of the voting power of the members present at a meeting where a quorum exists, or a majority of the total voting power of all members, is typically required, unless the articles of incorporation or bylaws specify a higher threshold. For corporations without members, the board of directors alone can typically approve dissolution, subject to any limitations in the articles or bylaws. The BOC also requires that upon dissolution, the corporation must cease carrying on its activities except those necessary to wind up its affairs. This winding-up process involves paying or making provision for all known debts and liabilities, distributing remaining assets according to the articles of incorporation or the BOC, and filing a certificate of dissolution with the Texas Secretary of State. The question centers on the procedural requirements for voluntary dissolution of a Texas nonprofit corporation, specifically the necessary approvals. The BOC mandates that a resolution of dissolution must be adopted by the board of directors and then submitted to the members for approval. If the nonprofit has members, their approval is generally required, with the specific voting threshold dictated by the bylaws or articles of incorporation, or by statute if the governing documents are silent. Without members, the board’s resolution is typically sufficient, though specific circumstances might necessitate further action. The critical element for a member-governed nonprofit is the member vote following board approval.

The scenario involves a Texas nonprofit corporation that has been operating for several years and wishes to amend its articles of incorporation to change its stated purpose and to add a provision for the dissolution of the corporation. Under the Texas Business Organizations Code (BOC), specifically Chapter 22, Subchapter D, a nonprofit corporation can amend its articles of incorporation. The process generally requires a resolution adopted by the board of directors and then approval by the voting members, if the corporation has members. If the corporation does not have members, the board of directors can approve the amendment. The Texas BOC requires that a certificate of amendment be filed with the Texas Secretary of State. This certificate must set forth the amendment, the manner of its adoption, and the date of adoption. For a change in the purpose of a nonprofit corporation, especially one that might affect its tax-exempt status, it is crucial that the amendment aligns with the requirements for public charities or private foundations under Section 501(c)(3) of the Internal Revenue Code, if applicable. Adding a dissolution clause is also a common amendment. The key legal requirement for the amendment to become effective is the filing of the certificate of amendment with the Texas Secretary of State. Without this filing, the amendments are not legally binding against third parties or for internal corporate governance purposes, although the board and members may have internally agreed to them. Therefore, the correct step to effectuate the amendments is to file the certificate of amendment.

The scenario involves a Texas nonprofit corporation, “The Heritage Preservation Society of Austin,” which is considering a significant land acquisition. Under Texas law, specifically the Texas Business Organizations Code (BOC), a nonprofit corporation generally has the power to acquire, hold, and dispose of real property. However, for a nonprofit, particularly one with a charitable or public purpose, the disposition of assets, especially those vital to its mission like land, often requires careful consideration of fiduciary duties and potential implications for its tax-exempt status. The Texas BOC, in conjunction with IRS regulations governing 501(c)(3) organizations, mandates that such transactions must be conducted in a manner that serves the organization’s exempt purposes and benefits the corporation, not private individuals. When a nonprofit sells or otherwise disposes of substantial assets, especially if the transaction could be construed as a private benefit or inurement, or if it significantly deviates from its stated mission, the board of directors must exercise due diligence. This includes ensuring the transaction is for fair market value and that any proceeds are used to further the organization’s exempt purposes. While there isn’t a specific statutory requirement for court approval for every land sale by a Texas nonprofit, the board’s decision-making process is subject to scrutiny for compliance with its fiduciary duties and its governing documents. The key concern is whether the sale of the historic property, which is central to the organization’s mission of preservation, would constitute an improper diversion of assets or a violation of the public trust inherent in its tax-exempt status. Texas law emphasizes that nonprofit assets are dedicated to charitable purposes. Therefore, a sale that does not demonstrably advance these purposes, or that benefits private interests, would be problematic. The question hinges on the board’s responsibility to ensure the transaction aligns with the organization’s mission and legal obligations, rather than a procedural requirement for court approval for all asset dispositions.

The Texas Business Organizations Code (BOC) governs the formation and operation of nonprofit corporations in Texas. Specifically, Chapter 22 of the BOC outlines the requirements for establishing a nonprofit corporation, including the need for a certificate of formation filed with the Texas Secretary of State. This certificate must contain specific information such as the name of the corporation, its purpose, the names and addresses of its initial directors, and the name and address of its registered agent. The concept of a “registered agent” is crucial as it designates a physical location within Texas where legal notices and official communications can be served upon the corporation. Failure to maintain a registered agent can lead to administrative dissolution. Additionally, a nonprofit corporation must adopt bylaws that govern its internal operations, including membership, board meetings, and officer duties. While Texas law encourages public benefit, it does not mandate that a nonprofit corporation must engage in activities exclusively for public benefit if it is formed for a different lawful purpose, such as mutual benefit or religious purposes, as long as those purposes are permissible under the BOC. The purpose clause in the certificate of formation dictates the scope of the corporation’s activities.

In Texas, a nonprofit corporation’s ability to engage in political activity is governed by specific statutes and IRS regulations. While Texas law, particularly the Texas Business Organizations Code, permits nonprofits to engage in certain advocacy, direct participation in political campaigns, such as endorsing candidates or making contributions to political campaigns, is generally prohibited for organizations seeking or maintaining tax-exempt status under Section 501(c)(3) of the Internal Revenue Code. The IRS strictly scrutinizes any activity that could be construed as partisan political campaigning. For a Texas nonprofit to maintain its tax-exempt status, it must ensure its activities are primarily educational, charitable, or other exempt purposes, and that no part of its net earnings benefits any private shareholder or individual, nor does it engage in substantial lobbying or any political campaign activity. If a nonprofit engages in prohibited political campaign intervention, it risks losing its tax-exempt status, which is a severe consequence. The question tests the understanding of the limitations placed on Texas nonprofits concerning political activities, specifically focusing on the consequence of violating these rules in relation to their tax-exempt status. The core principle is that direct involvement in political campaigns jeopardizes the organization’s ability to operate as a tax-exempt entity under federal law, which Texas nonprofits must adhere to.

The Texas Business Organizations Code (BOC) governs the formation and operation of nonprofit corporations. Specifically, Chapter 22 of the BOC outlines the requirements for filing a Certificate of Formation for a nonprofit corporation. To form a nonprofit corporation in Texas, the Certificate of Formation must include certain mandatory provisions. These include the name of the corporation, the purpose for which it is organized, the name and address of the registered agent, and the names and addresses of the initial directors. The statute also requires that the certificate specify whether the corporation is to be a “public benefit” or “mutual benefit” corporation, although this distinction is more relevant for federal tax exemption purposes. The question focuses on the essential elements required by Texas law for the initial filing. The Certificate of Formation serves as the foundational document establishing the legal existence of the nonprofit entity. Without these core components, the filing would be incomplete and would not satisfy the statutory requirements for incorporation. Therefore, the absence of the name and address of the registered agent would render the filing insufficient under Texas law.

The Texas Business Organizations Code (BOC) governs nonprofit corporations. Specifically, Chapter 22 of the BOC addresses the formation and operation of nonprofit corporations. A key aspect of nonprofit governance involves the rights and responsibilities of members and directors. When a nonprofit corporation’s articles of incorporation or bylaws do not specify the number of directors or the method for determining the number of directors, the law provides a default. Texas Business Organizations Code Section 22.231 states that if the number of directors is not specified, the number of directors shall be not less than three. Furthermore, Section 22.302 outlines the powers of the board of directors, including the authority to appoint directors to fill vacancies. However, the question focuses on the initial establishment of the board when the articles are silent. In such a scenario, the initial directors are typically named in the articles of incorporation, or if not, the incorporators have the power to appoint the first board. The Texas BOC, in Section 22.053, grants incorporators the power to appoint the initial directors if the articles do not name them. The question specifies that the articles of incorporation are silent on the number of directors, implying a need to determine the minimum statutory requirement for a functioning board. Texas Business Organizations Code Section 22.231(b) mandates that a nonprofit corporation must have at least three directors. Therefore, when the articles are silent, the board must consist of at least three individuals to comply with the statutory minimum.

The scenario describes a Texas nonprofit corporation, “Texan Heritage Preservation Society,” which is a public charity. It received a significant donation from a private foundation. Under the Texas Business Organizations Code, specifically provisions related to public charities and their governance, a public charity can accept contributions from various sources, including private foundations, government entities, and individuals. The key consideration for a public charity is maintaining its tax-exempt status, typically under Section 501(c)(3) of the Internal Revenue Code, which Texas law generally aligns with for state tax purposes. The Texas Business Organizations Code, in Chapter 22, Subchapter E, outlines the powers and duties of directors and officers of nonprofit corporations. Directors have a duty of care and a duty of loyalty. Accepting a donation, even from a private foundation, does not inherently violate these duties unless the terms of the donation are detrimental to the organization or if directors have a conflict of interest. The question asks about the most appropriate action by the board of directors. Reviewing the donation agreement to ensure it aligns with the organization’s mission and does not impose undue restrictions is a prudent step. However, the Texas Business Organizations Code does not mandate a specific waiting period or require a supermajority vote for accepting a donation from a private foundation, as long as the donation is consistent with the organization’s charitable purpose and the board acts in good faith. The power to accept donations is generally vested in the board or delegated to officers, subject to the bylaws. Therefore, the board’s primary responsibility is to ensure the donation serves the organization’s mission and complies with applicable laws and its own governing documents. The scenario does not present any red flags that would necessitate immediate dissolution or reporting to the Texas Attorney General’s office, as these actions are typically reserved for cases of gross mismanagement, fraud, or a fundamental change in purpose. The Texas Business Organizations Code allows for the board to accept gifts and donations, and for the board to delegate authority for such acceptance. The most direct and appropriate action for the board, given no immediate conflict or impropriety is evident, is to review and approve the donation if it aligns with the mission, which is a standard governance practice.

The scenario describes a situation where a Texas nonprofit corporation, “The Lonestar Benevolent Society,” has received a substantial donation from a donor who has specified that the funds must be used for the direct provision of educational materials to underserved youth in El Paso, Texas. The question revolves around the fiduciary duties of the board of directors in managing this restricted donation. Texas law, particularly the Texas Business Organizations Code (BOC), imposes strict duties on directors of nonprofit corporations. These include the duty of care and the duty of loyalty. When a donation is restricted by the donor for a specific purpose, the directors have a fiduciary obligation to ensure the funds are used precisely as intended. Failure to do so could constitute a breach of their duties. The BOC requires directors to act in good faith, in a manner the director reasonably believes to be in the best interest of the corporation, and with the care that a reasonably prudent person in a like position would exercise under similar circumstances. Misappropriating or diverting restricted funds to purposes other than those specified by the donor directly violates these duties. The board must establish clear procedures for tracking and expending restricted funds to ensure compliance. If the board were to use these funds for general operating expenses or for programs not aligned with the donor’s explicit intent, they would be acting contrary to their fiduciary responsibilities, potentially exposing the corporation and themselves to legal challenges. Therefore, the primary obligation is to adhere strictly to the donor’s stipulations.

The Texas Business Organizations Code (BOC) governs the formation and operation of nonprofit corporations. Section 202.002 of the BOC outlines the requirements for filing a Certificate of Formation for a nonprofit corporation. This certificate must include specific information, such as the name of the corporation, the purpose for which it is organized, and the names and addresses of the initial directors. Section 202.004 details the requirements for the initial registered agent and registered office. The initial registered agent must be an individual resident of Texas or a qualified Texas entity, and the registered office must be a physical street address in Texas. Furthermore, Section 202.005 specifies that the certificate must be signed by the incorporator. The question asks about the minimum number of initial directors required for a Texas nonprofit corporation. While the BOC requires at least one director, it does not mandate a specific number beyond that for the initial filing of the Certificate of Formation itself. The subsequent bylaws or articles of incorporation might specify a minimum number of directors for ongoing governance, but the formation document does not impose a higher threshold than one. Therefore, the statutory minimum for initial directors is one.

The Texas Business Organizations Code (BOC) governs the formation and operation of nonprofit corporations. Specifically, Chapter 22 of the BOC outlines the requirements for establishing and maintaining a nonprofit entity in Texas. When a nonprofit corporation in Texas ceases to operate and wishes to dissolve, it must follow a statutory process to wind up its affairs and terminate its legal existence. This process involves several key steps. First, the corporation must adopt a resolution of dissolution, typically by a vote of its members or board of directors, depending on the corporation’s bylaws and the specific provisions of the BOC. Following the adoption of the dissolution resolution, the corporation must file a Certificate of Termination with the Texas Secretary of State. This certificate formally notifies the state that the corporation is dissolving. Crucially, before or concurrently with filing the termination certificate, the corporation must wind up its affairs. This winding-up period involves ceasing its normal business activities, collecting its assets, paying or making provision for the payment of its liabilities, and distributing any remaining assets in accordance with the BOC and its own governing documents. Section 22.40 of the Texas Business Organizations Code specifies that upon dissolution, a nonprofit corporation must distribute its assets in a manner that is consistent with its purpose. For public charities, this typically means distributing assets to another organization that is also exempt under Section 501(c)(3) of the Internal Revenue Code, or to a governmental unit for a public purpose. Private foundations have similar distribution requirements. Failure to properly distribute assets can lead to the dissolution being deemed invalid or to potential penalties. Therefore, the correct sequence involves adopting a dissolution resolution, filing the termination certificate, and then completing the winding up and asset distribution.

The scenario involves a Texas nonprofit corporation, “Galveston Arts Collective,” that received a grant from the Texas Commission on the Arts for a specific project. Subsequently, the corporation’s board of directors, acting in good faith and believing it to be in the best interest of the organization, decided to reallocate a portion of the grant funds to a different, but related, artistic initiative that was also aligned with the organization’s charitable purpose. This reallocation occurred without explicit prior approval from the Texas Commission on the Arts, although the organization’s bylaws permit the board to direct the use of funds consistent with the organization’s mission. Under Texas law, specifically the Texas Non-Profit Corporation Act (now largely codified within the Texas Business Organizations Code), a nonprofit corporation’s board of directors has the fiduciary duty to manage the organization’s affairs prudently and in furtherance of its stated purposes. When a nonprofit receives restricted grants, the use of those funds is generally governed by the terms of the grant agreement. However, the question of whether a board can reallocate funds without explicit grantor approval hinges on the specific terms of the grant, the nonprofit’s governing documents, and applicable state law regarding donor restrictions and board discretion. In this case, the reallocation was for a “different, but related, artistic initiative” and was “aligned with the organization’s charitable purpose.” The key legal principle here is the concept of “donor intent” versus “cy pres” principles, and the extent to which a board can exercise discretion when the original purpose of the grant might be slightly altered but still serves the broader mission. Texas law, like many jurisdictions, recognizes that if a specific purpose for which a gift was made becomes impossible, impracticable, or illegal, a court may direct the use of the property in a manner that approximates the original intent as closely as possible (the cy pres doctrine). However, this typically involves a court order or specific provisions in the grant agreement allowing for such redirection. Without explicit permission from the grantor or a clear provision in the grant agreement allowing for such reallocation, or a judicial determination under cy pres, the board’s action could be viewed as a breach of the grant’s terms. The Texas Business Organizations Code, while granting broad powers to directors, does not override specific contractual obligations or donor restrictions unless specified by law or court order. Therefore, the most accurate assessment is that the board’s unilateral decision to reallocate funds without grantor consent, even if for a related purpose, likely constitutes a violation of the grant’s specific terms. The Texas Commission on the Arts, as the grantor, has the right to enforce the terms of its grant agreements.

The Texas Business Organizations Code (BOC) governs nonprofit corporations. Specifically, Chapter 22 of the BOC addresses the formation, governance, and dissolution of nonprofit corporations. When a nonprofit corporation in Texas wishes to amend its articles of incorporation to change its purpose, it must follow a specific procedure. This procedure involves a resolution by the board of directors, followed by a vote of the members if the articles of incorporation grant members the right to vote on such matters, or if the articles require member approval for amendments. If the articles of incorporation are silent on member voting for amendments, or if the corporation has no members, the board of directors can typically approve the amendment. However, a fundamental change like altering the charitable purpose usually necessitates member approval if members exist and have voting rights. The BOC requires that any amendment to the articles of incorporation be filed with the Texas Secretary of State. The filing fee for such an amendment is a standard fee set by the Secretary of State for amending corporate documents. This fee is not tied to the complexity of the amendment or the nature of the change in purpose. The Texas Comptroller of Public Accounts is responsible for state tax matters, including franchise tax, but amendments to articles of incorporation are filed with the Secretary of State, not the Comptroller. The Attorney General’s office becomes involved in specific situations, such as oversight of charitable trusts or enforcement actions, but not for a routine amendment of articles of incorporation to change purpose. The Texas Ethics Commission deals with campaign finance and lobbying, which are unrelated to amending corporate articles. Therefore, the filing of the amendment with the Texas Secretary of State, accompanied by the prescribed filing fee, is the correct step. The current statutory filing fee for amending articles of incorporation in Texas is \$50.

The Texas Business Organizations Code (BOC) governs the formation and operation of nonprofit corporations in Texas. Specifically, Chapter 22 of the BOC outlines the requirements for nonprofit corporations. When a nonprofit corporation in Texas desires to change its purpose, it must follow a formal amendment process. This process typically involves a resolution by the board of directors and approval by the members, if the corporation has members. The amended articles of incorporation, reflecting the new purpose, must then be filed with the Texas Secretary of State. The question asks about the primary legal instrument that would be amended to reflect a change in purpose. The articles of incorporation are the foundational document that establishes the nonprofit’s existence and its stated purpose. Changes to fundamental aspects like the organization’s mission or primary activities necessitate an amendment to these articles. Other documents, such as bylaws, may also be amended to align with the new purpose, but the articles of incorporation are the primary legal filing that formally records the change with the state. The certificate of formation is essentially the same as the articles of incorporation for Texas entities. A dissolution decree is related to ending the corporation, not changing its purpose. A board resolution is an internal document that initiates the process but does not, by itself, change the publicly filed articles.

In Texas, a nonprofit corporation seeking to dissolve voluntarily must follow a specific statutory process. The initial step involves a resolution by the board of directors recommending dissolution. This resolution must then be submitted to the members, if any, for approval. For corporations with members, the Texas Business Organizations Code (BOC) generally requires a vote of two-thirds of the members entitled to vote, unless the certificate of formation or bylaws specify a different voting threshold. If the corporation has no members, or if the members have no voting rights on dissolution, the board of directors alone can approve the dissolution by a two-thirds vote. Following member or board approval, the corporation must file a Certificate of Dissolution with the Texas Secretary of State. Prior to filing this certificate, the corporation must wind up its affairs, which includes ceasing operations, collecting assets, paying debts and liabilities, and distributing any remaining assets to designated recipients. These recipients must be entities that qualify for tax-exempt status under Section 501(c)(3) of the Internal Revenue Code, or for other purposes consistent with the nonprofit’s original purpose, as outlined in its certificate of formation. The question asks about the required approval for voluntary dissolution of a Texas nonprofit corporation that has members with voting rights. Therefore, the correct answer reflects the statutory requirement for member approval.

The Texas Business Organizations Code (BOC) governs nonprofit corporations. Specifically, Chapter 22 of the BOC addresses nonprofit corporations. A key aspect of this chapter relates to the powers of directors and officers, particularly concerning actions taken by a director who is also an officer. When a director also serves as an officer, their actions as an officer are generally considered to be within the scope of their directorial authority unless specifically limited by the bylaws or articles of incorporation. However, if a director acts *solely* in their capacity as an officer, and that action exceeds the authority granted to officers by the corporation’s governing documents or Texas law, then the validity of that action might be questioned. The question posits a scenario where a director, who also holds an officer position, executes a contract. The critical point is whether this action is *ultra vires* (beyond the powers of the corporation or its officers). In Texas, directors have broad authority to manage the affairs of the corporation. An officer’s actions, when aligned with their duties and the corporation’s purposes, are typically binding. The scenario implies the contract was executed by the director in their official capacity as an officer. Without any indication that the contract itself was outside the corporation’s authorized activities or that the director-officer exceeded their specific delegated authority as an officer, the contract is presumed valid. The Texas Business Organizations Code, specifically sections related to corporate powers and the authority of officers and directors, supports the validity of such actions when performed in good faith and within the scope of corporate powers. The question tests the understanding that an officer’s actions, when executed within their corporate role and not explicitly prohibited or exceeding authorized powers, bind the corporation, especially when that officer is also a director.

The Texas Business Organizations Code (BOC) governs the formation and operation of nonprofit corporations in Texas. When a nonprofit corporation intends to dissolve, it must follow a specific statutory process to ensure its affairs are properly wound up and its assets are distributed appropriately. This process typically involves a resolution by the board of directors and, often, approval by the members, depending on the corporation’s bylaws and the BOC. Following the adoption of a dissolution resolution, the corporation must file a Certificate of Dissolution with the Texas Secretary of State. Crucially, during the winding-up period, the corporation continues to exist for the purpose of closing its business, collecting assets, paying debts and liabilities, and distributing remaining assets. Section 22.331 of the Texas BOC outlines the procedures for dissolution, including the requirement to notify creditors. Distribution of assets upon dissolution is governed by Section 22.333, which mandates that assets be distributed for charitable purposes consistent with the corporation’s original mission, or to other organizations that qualify as exempt under Section 501(c)(3) of the Internal Revenue Code. Failure to adhere to these procedures can lead to improper dissolution and potential liabilities for the directors and officers. The specific timing for filing the Certificate of Dissolution after the resolution is adopted is not a fixed number of days but rather a procedural step that must occur after the decision to dissolve is finalized and before the final distribution of assets. The question tests the understanding of the necessary steps and the statutory framework for dissolution under Texas law.

The scenario involves a Texas nonprofit corporation that wishes to sell a parcel of land it owns. Under Texas law, specifically the Texas Business Organizations Code (BOC), a nonprofit corporation generally has the power to sell, lease, or otherwise dispose of its property. However, the BOC also outlines specific requirements for such transactions to ensure they are conducted in the best interest of the corporation and its charitable purposes. For a sale of substantially all of its assets, or a sale that would fundamentally alter the nature of the organization, a vote of the members or directors, depending on the corporation’s bylaws, is typically required. The Texas BOC, in Section 22.302(b), states that a corporation may sell, lease, exchange, or otherwise dispose of all or substantially all of its property on terms and conditions and for considerations, which may be money or other property, as the board of directors deems to be in the best interests of the corporation. If the corporation has members, the bylaws will dictate whether member approval is also required. Assuming the bylaws require a supermajority vote of the board of directors for a sale of a significant asset like a parcel of land, and the board has approved the sale by a two-thirds vote, the transaction is valid, provided it complies with any other applicable Texas statutes or federal regulations, such as those related to donor-restricted property or property acquired through specific grants. The explanation focuses on the statutory authority for asset disposition by a Texas nonprofit corporation and the typical approval processes involved, emphasizing the board’s role and potential member involvement as dictated by the corporation’s governing documents. The specific vote threshold of two-thirds of the board of directors is a common requirement for significant corporate actions, ensuring broad consensus among the governing body.

The scenario involves a Texas nonprofit corporation, “Texan Heritage Preservation Society,” which is a public charity. It has a board of directors and is seeking to amend its articles of incorporation to change its name and expand its stated purpose. Under the Texas Business Organizations Code (BOC), specifically Section 22.301, a nonprofit corporation’s articles of incorporation may be amended by a resolution adopted by the board of directors. For a public charity, a majority vote of the directors then in office is generally sufficient to approve such amendments, unless the articles of incorporation or bylaws specify a higher voting threshold. The question asks about the required approval for this amendment. Since the organization is a public charity and no higher threshold is indicated in the hypothetical, a majority vote of the board of directors is the standard requirement for amending the articles of incorporation. Therefore, the action taken by the board of directors, assuming a quorum was present and a majority voted in favor, is the correct procedural step.

The scenario describes a Texas nonprofit corporation, “Prairie Roots Foundation,” that received a significant donation restricted for a specific educational program. The question probes the legal implications of the board’s decision to redirect these funds to a different, albeit related, program due to unforeseen circumstances. In Texas, nonprofit corporations are governed by the Texas Business Organizations Code (BOC). When a donor imposes restrictions on a contribution, the nonprofit must generally adhere to those restrictions. However, the BOC, specifically Section 22.303, provides a mechanism for modifying or terminating a restriction on a gift if it becomes impossible, impracticable, or a material change in circumstances has occurred, rendering the original purpose of the restriction substantially fulfilled or impossible to achieve. This process typically requires a court order or, in certain limited circumstances, specific board action if the governing documents permit and the amount is below a statutory threshold for court involvement. The key is that the board cannot unilaterally decide to redirect restricted funds without a legal basis for doing so, such as a court-approved deviation or a specific provision in the gift instrument or the nonprofit’s bylaws that allows for such reallocation under defined conditions. Simply deciding the original purpose is no longer the “most beneficial” does not automatically grant the board the authority to ignore donor intent. The board’s action, as described, potentially constitutes a breach of trust and a violation of the donor’s intent, which could lead to legal challenges from the donor or beneficiaries, or regulatory action. The correct legal avenue would involve seeking judicial approval to modify the restriction, demonstrating the impossibility or impracticability of the original purpose.

The Texas Business Organizations Code (BOC) governs the formation and operation of nonprofit corporations in Texas. Specifically, Chapter 22 of the BOC outlines the requirements for establishing and maintaining a nonprofit entity. A key aspect of this chapter is the process for amending the certificate of formation. For a nonprofit corporation, any amendment to its certificate of formation requires a resolution adopted by the board of directors, followed by a vote of the members if the certificate of formation or bylaws grant members the right to vote on such matters. However, if the certificate of formation is silent on member voting rights for amendments, or if the bylaws vest the exclusive authority to amend in the board, then only the board’s approval is necessary. The question specifies that the bylaws grant the board of directors the sole authority to amend the certificate of formation. Therefore, the amendment only requires a resolution approved by the board of directors, without the need for member approval. The filing of the amendment with the Texas Secretary of State is a ministerial act that follows the internal corporate approval process.