Hawaii Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation

• Category: Corporations - Shareholders and Stock
• State: Multi-State
• Control #: US-1085BG
• Format: Word; Rich Text

Description

A corporation whose shares are held by a single shareholder or a closely-knit group of shareholders (such as a family) is known as a close corporation. The shares of stock are not traded publicly. A shareholders' agreement may contain provisions relating to any phase of the affairs of a close corporation. Statutes often provide that the agreement may, as between the parties to the agreement, alter or waive the provisions of the general corporation law except those provisions that are specifically exempt from such alteration or waiver. A shareholders' agreement may not be altered or terminated except as provided by the agreement, or by all the parties, or by operation of law. A Hawaii Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation is a legally binding document that outlines the rights and obligations of shareholders in a close corporation in Hawaii regarding the allocation of dividends. In a close corporation, which is a privately held company with a limited number of shareholders, it is common to have a specific provision regarding the allocation of dividends among shareholders. This provision allows for the distributions of profits generated by the close corporation to be divided in a manner different from the standard pro rata distribution typically found in regular corporations. The main purpose of a Hawaii Shareholders' Agreement with Special Allocation of Dividends is to ensure fairness and provide flexibility to shareholders when it comes to the distribution of dividends. This agreement allows shareholders to negotiate and agree on a specific allocation method that considers various factors such as the capital contributions, share ownership percentages, and financial performance of individual shareholders within the close corporation. The agreement may include different types of special allocation methods, some of which are: 1. Fixed Percentage Allocation: This method assigns a predetermined percentage of dividends to each shareholder based on their agreed-upon share ownership percentage. For example, if a shareholder holds 30% of the shares, they will receive 30% of the dividends. 2. Prioritization Allocation: This method prioritizes certain shareholders to receive dividends before others. It can be based on factors such as seniority, preferred stock, or specific profit-sharing arrangements agreed upon within the agreement. 3. Performance-Based Allocation: This method takes into account the individual performance or contribution of each shareholder to the close corporation's success. Shareholders who have made significant contributions or achieved specific milestones may receive a higher dividend allocation. 4. Hybrid Allocation: This method combines various allocation methods to create a more customized dividend distribution plan. It aims to consider a combination of factors such as ownership percentage, seniority, and performance to determine the allocation of dividends among shareholders. It is important to note that the specific types of Hawaii Shareholders' Agreements with Special Allocation of Dividends among Shareholders in a Close Corporation may vary depending on the specific needs and preferences of the shareholders involved. These agreements are highly customizable and should be drafted or reviewed by a qualified attorney familiar with Hawaii corporate law to ensure their compliance and effectiveness. Overall, a Hawaii Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation allows shareholders of a close corporation in Hawaii to tailor the distribution of dividends to their unique circumstances, promoting fairness and flexibility within the company.

A Hawaii Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation is a legally binding document that outlines the rights and obligations of shareholders in a close corporation in Hawaii regarding the allocation of dividends. In a close corporation, which is a privately held company with a limited number of shareholders, it is common to have a specific provision regarding the allocation of dividends among shareholders. This provision allows for the distributions of profits generated by the close corporation to be divided in a manner different from the standard pro rata distribution typically found in regular corporations. The main purpose of a Hawaii Shareholders' Agreement with Special Allocation of Dividends is to ensure fairness and provide flexibility to shareholders when it comes to the distribution of dividends. This agreement allows shareholders to negotiate and agree on a specific allocation method that considers various factors such as the capital contributions, share ownership percentages, and financial performance of individual shareholders within the close corporation. The agreement may include different types of special allocation methods, some of which are: 1. Fixed Percentage Allocation: This method assigns a predetermined percentage of dividends to each shareholder based on their agreed-upon share ownership percentage. For example, if a shareholder holds 30% of the shares, they will receive 30% of the dividends. 2. Prioritization Allocation: This method prioritizes certain shareholders to receive dividends before others. It can be based on factors such as seniority, preferred stock, or specific profit-sharing arrangements agreed upon within the agreement. 3. Performance-Based Allocation: This method takes into account the individual performance or contribution of each shareholder to the close corporation's success. Shareholders who have made significant contributions or achieved specific milestones may receive a higher dividend allocation. 4. Hybrid Allocation: This method combines various allocation methods to create a more customized dividend distribution plan. It aims to consider a combination of factors such as ownership percentage, seniority, and performance to determine the allocation of dividends among shareholders. It is important to note that the specific types of Hawaii Shareholders' Agreements with Special Allocation of Dividends among Shareholders in a Close Corporation may vary depending on the specific needs and preferences of the shareholders involved. These agreements are highly customizable and should be drafted or reviewed by a qualified attorney familiar with Hawaii corporate law to ensure their compliance and effectiveness. Overall, a Hawaii Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation allows shareholders of a close corporation in Hawaii to tailor the distribution of dividends to their unique circumstances, promoting fairness and flexibility within the company.