Delaware 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. The Delaware Authority to Issue Additional Shares refers to the legal power granted to corporations incorporated in Delaware to increase the number of shares of their stock. This authority allows companies to issue new shares beyond their existing authorized capital. The Delaware General Corporation Law (DCL) bestows this authority upon corporations domiciled in Delaware. It enables corporations to adjust their capital structure by increasing the number of available shares, thereby providing flexibility for various financial transactions, such as raising additional capital or acquiring other businesses. There are different types of Delaware Authority to Issue Additional Shares, including: 1) Authorized Capital Increase: Corporations may seek approval from their shareholders to amend their Certificate of Incorporation and increase the authorized capital, which represents the maximum number of shares the corporation can issue. This approval requires a majority vote by shareholders. 2) Blank Check Preferred Stock: Delaware corporations often issue preferred stock with broad and non-specific rights, commonly known as "blank check" preferred stock. This type of stock allows companies to issue additional shares of preferred stock without the need for further shareholder approval or amending the Certificate of Incorporation. The detailed rights and preferences of these shares can be determined at a later date. 3) Amending the Certificate of Incorporation: Corporations can request to amend their Certificate of Incorporation, which is a legal document that outlines the company's structure and governance. By amending this document, corporations can increase their authorized shares or create new classes of stock, subject to shareholder approval. 4) Stock Splits: Another form of Delaware Authority to Issue Additional Shares is through stock splits. This occurs when the corporation increases the number of authorized shares but maintains the same proportion of ownership for existing shareholders. For example, a 2-for-1 stock split would double the number of shares held by each shareholder without changing their ownership percentage. 5) Dilute Financing: Companies with Delaware Authority to Issue Additional Shares can take advantage of dilute financing options, such as issuing new shares to raise capital from investors. By creating additional shares, corporations can attract new investments without significantly changing the ownership stakes of existing shareholders. In summary, the Delaware Authority to Issue Additional Shares allows corporations to adjust their capital structure by increasing the number of authorized shares. This authority unlocks opportunities for companies to raise capital, make strategic acquisitions, and adjust their ownership structure, offering flexibility in managing their financial operations.

The Delaware Authority to Issue Additional Shares refers to the legal power granted to corporations incorporated in Delaware to increase the number of shares of their stock. This authority allows companies to issue new shares beyond their existing authorized capital. The Delaware General Corporation Law (DCL) bestows this authority upon corporations domiciled in Delaware. It enables corporations to adjust their capital structure by increasing the number of available shares, thereby providing flexibility for various financial transactions, such as raising additional capital or acquiring other businesses. There are different types of Delaware Authority to Issue Additional Shares, including: 1) Authorized Capital Increase: Corporations may seek approval from their shareholders to amend their Certificate of Incorporation and increase the authorized capital, which represents the maximum number of shares the corporation can issue. This approval requires a majority vote by shareholders. 2) Blank Check Preferred Stock: Delaware corporations often issue preferred stock with broad and non-specific rights, commonly known as "blank check" preferred stock. This type of stock allows companies to issue additional shares of preferred stock without the need for further shareholder approval or amending the Certificate of Incorporation. The detailed rights and preferences of these shares can be determined at a later date. 3) Amending the Certificate of Incorporation: Corporations can request to amend their Certificate of Incorporation, which is a legal document that outlines the company's structure and governance. By amending this document, corporations can increase their authorized shares or create new classes of stock, subject to shareholder approval. 4) Stock Splits: Another form of Delaware Authority to Issue Additional Shares is through stock splits. This occurs when the corporation increases the number of authorized shares but maintains the same proportion of ownership for existing shareholders. For example, a 2-for-1 stock split would double the number of shares held by each shareholder without changing their ownership percentage. 5) Dilute Financing: Companies with Delaware Authority to Issue Additional Shares can take advantage of dilute financing options, such as issuing new shares to raise capital from investors. By creating additional shares, corporations can attract new investments without significantly changing the ownership stakes of existing shareholders. In summary, the Delaware Authority to Issue Additional Shares allows corporations to adjust their capital structure by increasing the number of authorized shares. This authority unlocks opportunities for companies to raise capital, make strategic acquisitions, and adjust their ownership structure, offering flexibility in managing their financial operations.