North Dakota 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. North Dakota Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation A North Dakota Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation is a legal document that outlines the rights, obligations, and responsibilities of the shareholders in a close corporation in North Dakota. A close corporation is a type of corporation that has a limited number of shareholders and operates under less stringent corporate governance regulations compared to public corporations. In this agreement, shareholders in a close corporation set forth their agreement on how dividends will be allocated among the shareholders. Key terms and provisions commonly found in such an agreement include: 1. Shareholder Allocations: The agreement specifies the allocation of dividends among the shareholders. This can be based on the percentage of ownership in the corporation or other agreed-upon criteria. 2. Profit and Loss Sharing: The agreement may also include provisions related to the sharing of profits and losses among the shareholders. This ensures fairness and transparency in the distribution of earnings and losses generated by the corporation. 3. Dividend Priority: The agreement may establish a priority order for the distribution of dividends. For example, it may prioritize payment of preferred dividends to certain shareholders before distributing dividends to common shareholders. 4. Dividend Reinvestment: The agreement can include provisions allowing shareholders to reinvest their dividends back into the corporation, promoting further growth and development. 5. Capital Contributions: The agreement may outline the obligations of shareholders to make capital contributions to the corporation. This ensures that all shareholders are committed to the financial health and stability of the corporation. Types of North Dakota Shareholders' Agreements with Special Allocation of Dividends among Shareholders in a Close Corporation may include: 1. Standard Shareholders' Agreement: This is a basic agreement that outlines the general terms and conditions related to dividend allocations among shareholders. 2. Preferred Shareholders' Agreement: This agreement is specifically tailored for corporations with preferred shareholders who have preferential rights to dividend payments. 3. Multiple Classes of Shareholders' Agreement: In situations where a close corporation has multiple classes of shareholders with different rights and preferences, this agreement establishes specific rules for dividend allocations. 4. Exit Strategy Shareholders' Agreement: This agreement may include provisions related to the distribution of dividends in the event of a shareholder's exit from the corporation, such as through a sale or transfer of shares. In conclusion, a North Dakota Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation is a crucial legal document that governs the allocation of dividends among shareholders in a close corporation. It ensures fairness, transparency, and clarity in dividend distributions, promoting harmony and stability within the corporation.

North Dakota Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation A North Dakota Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation is a legal document that outlines the rights, obligations, and responsibilities of the shareholders in a close corporation in North Dakota. A close corporation is a type of corporation that has a limited number of shareholders and operates under less stringent corporate governance regulations compared to public corporations. In this agreement, shareholders in a close corporation set forth their agreement on how dividends will be allocated among the shareholders. Key terms and provisions commonly found in such an agreement include: 1. Shareholder Allocations: The agreement specifies the allocation of dividends among the shareholders. This can be based on the percentage of ownership in the corporation or other agreed-upon criteria. 2. Profit and Loss Sharing: The agreement may also include provisions related to the sharing of profits and losses among the shareholders. This ensures fairness and transparency in the distribution of earnings and losses generated by the corporation. 3. Dividend Priority: The agreement may establish a priority order for the distribution of dividends. For example, it may prioritize payment of preferred dividends to certain shareholders before distributing dividends to common shareholders. 4. Dividend Reinvestment: The agreement can include provisions allowing shareholders to reinvest their dividends back into the corporation, promoting further growth and development. 5. Capital Contributions: The agreement may outline the obligations of shareholders to make capital contributions to the corporation. This ensures that all shareholders are committed to the financial health and stability of the corporation. Types of North Dakota Shareholders' Agreements with Special Allocation of Dividends among Shareholders in a Close Corporation may include: 1. Standard Shareholders' Agreement: This is a basic agreement that outlines the general terms and conditions related to dividend allocations among shareholders. 2. Preferred Shareholders' Agreement: This agreement is specifically tailored for corporations with preferred shareholders who have preferential rights to dividend payments. 3. Multiple Classes of Shareholders' Agreement: In situations where a close corporation has multiple classes of shareholders with different rights and preferences, this agreement establishes specific rules for dividend allocations. 4. Exit Strategy Shareholders' Agreement: This agreement may include provisions related to the distribution of dividends in the event of a shareholder's exit from the corporation, such as through a sale or transfer of shares. In conclusion, a North Dakota Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation is a crucial legal document that governs the allocation of dividends among shareholders in a close corporation. It ensures fairness, transparency, and clarity in dividend distributions, promoting harmony and stability within the corporation.