Arizona Clauses Relating to Dividends, Distributions

• Category: Partnerships - Drafting Joint Venture Agreements
• State: Multi-State
• Control #: US-P0608-3AM
• Format: Word; Rich Text

Description

This sample form, containing Clauses Relating to Dividends, Distributions document, is usable for corporate/business matters. The language is easily adaptable to fit your circumstances. You must confirm compliance with applicable law in your state. Available in Word format. Arizona Clauses Relating to Dividends, Distributions: In Arizona, the laws governing dividends and distributions for corporations are outlined in the Arizona Revised Statutes (A.R.S)Title 10, Chapter 2, specifically Section 10-2020. This section details the various provisions and restrictions related to dividends and distributions by corporations in the state of Arizona. Some key clauses relating to dividends and distributions in Arizona include the following: 1. Authorization of Dividends: — This clause sets out the authority of the corporation's board of directors to declare and pay dividends to its shareholders. — The clause specifies that dividends can only be paid out of the corporation's surplus, which is the excess of its net assets over its stated capital. — It also highlights the requirement of approval from the shareholders in certain cases, especially if dividends exceed the surplus. 2. Restriction on Dividends: — This clause states that dividends cannot be declared or paid if doing so would render the corporation insolvent. — The clause also prohibits the payment of dividends if the corporation's capital is impaired or if the corporation is unable to satisfy its liabilities as they become due in the usual course of business. 3. Determination of Dividends: — This clause outlines the factors that directors should consider in determining the amount and timing of dividends, such as the corporation's earnings, financial condition, cash flow, and capital requirements. — It emphasizes the need for directors to act in good faith and in the best interests of the corporation and its shareholders when making dividend decisions. 4. Dividend Payments as Lawful Distributions: — This clause confirms that dividends lawfully declared and paid by a corporation are considered distributions, not a reduction of stated capital. — It clarifies that such distributions do not impair the corporation's stated capital, which is the aggregate amount of its shares' par or stated value. 5. Liability for Unlawful Distributions: — This clause establishes the liability of directors who authorize or approve unlawful distributions, whether through dividends or otherwise. — It specifies that directors who acted in good faith and reasonably believed that the distribution was lawful will be protected from liability. It is important to consult the complete text of the applicable Arizona Revised Statutes to fully understand the rights, responsibilities, and limitations associated with dividends and distributions by corporations in Arizona. Additionally, legal advice from an attorney experienced in corporate law is recommended for any specific or unique scenarios.

Arizona Clauses Relating to Dividends, Distributions: In Arizona, the laws governing dividends and distributions for corporations are outlined in the Arizona Revised Statutes (A.R.S)Title 10, Chapter 2, specifically Section 10-2020. This section details the various provisions and restrictions related to dividends and distributions by corporations in the state of Arizona. Some key clauses relating to dividends and distributions in Arizona include the following: 1. Authorization of Dividends: — This clause sets out the authority of the corporation's board of directors to declare and pay dividends to its shareholders. — The clause specifies that dividends can only be paid out of the corporation's surplus, which is the excess of its net assets over its stated capital. — It also highlights the requirement of approval from the shareholders in certain cases, especially if dividends exceed the surplus. 2. Restriction on Dividends: — This clause states that dividends cannot be declared or paid if doing so would render the corporation insolvent. — The clause also prohibits the payment of dividends if the corporation's capital is impaired or if the corporation is unable to satisfy its liabilities as they become due in the usual course of business. 3. Determination of Dividends: — This clause outlines the factors that directors should consider in determining the amount and timing of dividends, such as the corporation's earnings, financial condition, cash flow, and capital requirements. — It emphasizes the need for directors to act in good faith and in the best interests of the corporation and its shareholders when making dividend decisions. 4. Dividend Payments as Lawful Distributions: — This clause confirms that dividends lawfully declared and paid by a corporation are considered distributions, not a reduction of stated capital. — It clarifies that such distributions do not impair the corporation's stated capital, which is the aggregate amount of its shares' par or stated value. 5. Liability for Unlawful Distributions: — This clause establishes the liability of directors who authorize or approve unlawful distributions, whether through dividends or otherwise. — It specifies that directors who acted in good faith and reasonably believed that the distribution was lawful will be protected from liability. It is important to consult the complete text of the applicable Arizona Revised Statutes to fully understand the rights, responsibilities, and limitations associated with dividends and distributions by corporations in Arizona. Additionally, legal advice from an attorney experienced in corporate law is recommended for any specific or unique scenarios.