Arkansas Authority to Issue Additional Shares

• Category: Corporations - Mergers and Acquisitions
• State: Multi-State
• Control #: US-CC-12-1931
• Format: Word; Rich Text

Description

This form may be used by a company's Board of Directors to allow for the purchase of additional stock beyond the original agreement with a second party. The form specifically states the conditions under which the additional purchase will be allowed. Arkansas Authority to Issue Additional Shares refers to the power granted to corporations incorporated in the state of Arkansas to increase their total number of authorized shares of capital stock. This authority allows companies to increase their equity capital, attract more investors, and potentially raise additional funds. The Arkansas Business Corporation Act governs the issuance of additional shares in Arkansas. Under this act, corporations can obtain the authority to issue additional shares either through their articles of incorporation or by obtaining a shareholder approval. There are two types of Arkansas Authority to Issue Additional Shares: 1. Preemptive Right: Preemptive right is the first type of authority granted to shareholders, which allows them to maintain their proportional ownership in the company. If a corporation decides to issue additional shares, shareholders with preemptive rights have the privilege to purchase these new shares before they are sold to outside investors. This ensures that existing shareholders have the opportunity to protect their ownership percentage and avoid dilution. 2. Non-Preemptive Right: Non-preemptive right, also known as "non-dilution clause," is the second type of authority to issue additional shares. With this provision, a corporation can issue new shares without offering them to existing shareholders first. Non-preemptive right is commonly utilized when a company seeks to bring in new investors or raise capital without giving existing shareholders the opportunity to acquire additional shares. It is essential for corporations to adhere to the regulations outlined in the Arkansas Business Corporation Act when exercising their authority to issue additional shares. Failure to comply with these rules may result in legal consequences or challenges from shareholders. Overall, the Arkansas Authority to Issue Additional Shares provides flexibility for corporations to raise capital and expand their operations by increasing the number of authorized shares. Whether through preemptive or non-preemptive rights, this authority enables companies to strategically manage their equity structure and attract new investments.

Arkansas Authority to Issue Additional Shares refers to the power granted to corporations incorporated in the state of Arkansas to increase their total number of authorized shares of capital stock. This authority allows companies to increase their equity capital, attract more investors, and potentially raise additional funds. The Arkansas Business Corporation Act governs the issuance of additional shares in Arkansas. Under this act, corporations can obtain the authority to issue additional shares either through their articles of incorporation or by obtaining a shareholder approval. There are two types of Arkansas Authority to Issue Additional Shares: 1. Preemptive Right: Preemptive right is the first type of authority granted to shareholders, which allows them to maintain their proportional ownership in the company. If a corporation decides to issue additional shares, shareholders with preemptive rights have the privilege to purchase these new shares before they are sold to outside investors. This ensures that existing shareholders have the opportunity to protect their ownership percentage and avoid dilution. 2. Non-Preemptive Right: Non-preemptive right, also known as "non-dilution clause," is the second type of authority to issue additional shares. With this provision, a corporation can issue new shares without offering them to existing shareholders first. Non-preemptive right is commonly utilized when a company seeks to bring in new investors or raise capital without giving existing shareholders the opportunity to acquire additional shares. It is essential for corporations to adhere to the regulations outlined in the Arkansas Business Corporation Act when exercising their authority to issue additional shares. Failure to comply with these rules may result in legal consequences or challenges from shareholders. Overall, the Arkansas Authority to Issue Additional Shares provides flexibility for corporations to raise capital and expand their operations by increasing the number of authorized shares. Whether through preemptive or non-preemptive rights, this authority enables companies to strategically manage their equity structure and attract new investments.