Hawaii 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.

Hawaii Clauses Relating to Dividends, Distributions: A Detailed Description In Hawaii, there are several clauses related to dividends and distributions that play a crucial role in the legal and financial aspects of business operations. These clauses are designed to ensure fairness, transparency, and the protection of shareholders' rights. Let's explore these clauses in detail: 1. Dividend Authorization Clause: The Dividend Authorization Clause is a provision typically included in a corporation's articles of incorporation or bylaws. It outlines the process by which dividends are authorized to be distributed to shareholders. This clause often specifies the required approvals, such as the board of directors' resolution, the minimum retained earnings, and any limitations or restrictions regarding dividend payments. 2. Dividend Payment Clause: The Dividend Payment Clause details the mechanism for distributing dividends to shareholders. It typically includes provisions such as the frequency of dividend payments, the method of payment (e.g., cash, stock dividends), and the determination of dividend amounts (e.g., a fixed percentage of profits or discretionary decisions by the board of directors). 3. Cumulative Dividend Clause: In cases where regular dividends cannot be declared or paid due to financial constraints or low profitability, the Cumulative Dividend Clause comes into play. This clause allows for unpaid dividends to accumulate as arrears or cumulative dividends, which must be paid to shareholders before any future dividends can be distributed. 4. Preferred Dividend Clause: The Preferred Dividend Clause is particularly relevant to preferred stockholders. It outlines the rights associated with preferred shares and specifies preferential dividend rates or amounts that must be paid out to preferred shareholders before any dividends can be distributed to common stockholders. 5. Dividend Waiver Clause: In certain situations, shareholders may voluntarily waive their right to receive dividends. The Dividend Waiver Clause provides a legal framework for such waivers, ensuring that they are properly documented and executed. This clause may also specify the conditions or considerations for the waiver. 6. Distribution Restriction Clause: In entities like partnerships or limited liability companies (LCS), a Distribution Restriction Clause may be included in the governing agreements (e.g., partnership agreement, operating agreement). This clause places limitations on the ability of the entity to distribute profits or assets to partners or members, ensuring that the entity's financial stability and obligations are adequately maintained. It is important to note that the specific language and provisions of these clauses may vary depending on the company's governance documents, such as the articles of incorporation, bylaws, shareholder agreements, or partnership agreements. It is advisable to seek legal counsel or consult the applicable statutes and regulations for precise and up-to-date information regarding Hawaii clauses relating to dividends and distributions.