New Mexico 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 Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation in New Mexico is a legally binding contract that governs the rights and obligations of shareholders in a close corporation regarding the allocation of dividends. This agreement sets out the rules and procedures for distributing profits among shareholders in a manner different from their respective ownership percentages. In New Mexico, there are various types of Shareholders' Agreements with Special Allocation of Dividends among Shareholders in a Close Corporation that can be employed based on the specific needs and preferences of the shareholders. Below are some different types: 1. Proportional Income Share Agreement: This type of agreement distributes dividends in proportion to each shareholder's ownership percentage in the close corporation. It adheres to the principle of reflecting ownership stakes in the allocation of profits. 2. Fixed Dividend Share Agreement: In this agreement, shareholders receive a predetermined fixed dividend amount, regardless of their ownership percentage. This ensures consistent and stable dividend payouts for shareholders, irrespective of fluctuations in profits or ownership changes. 3. Equity-Based Dividend Share Agreement: This type of agreement allocates dividends based on the shareholders' contribution to the corporation's equity. It considers factors such as capital investment, intellectual property, or expertise, and rewards shareholders accordingly. 4. Performance-Based Dividend Share Agreement: This agreement links dividend allocations to the individual or collective performance of shareholders. Various performance metrics, such as sales targets, profitability ratios, or achieving specific milestones, can be used to determine the dividend share of each shareholder. 5. Founder/Management Dividend Share Agreement: In close corporations where founding members or key management personnel hold significant roles, this type of agreement may provide them with a higher dividend share as a reward for their expertise, efforts, or entrepreneurial vision. Regardless of the specific type, a Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation in New Mexico typically addresses various aspects. These include the process for determining dividend amounts, the frequency of dividend payouts, mechanisms for dispute resolution, restrictions on transfer of shares, terms for exiting shareholders, voting rights, and other governance matters. Consulting legal professionals well-versed in New Mexico corporate law is advisable to draft and customize the Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation, ensuring compliance with state regulations and addressing the unique needs and preferences of the shareholders involved.

A Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation in New Mexico is a legally binding contract that governs the rights and obligations of shareholders in a close corporation regarding the allocation of dividends. This agreement sets out the rules and procedures for distributing profits among shareholders in a manner different from their respective ownership percentages. In New Mexico, there are various types of Shareholders' Agreements with Special Allocation of Dividends among Shareholders in a Close Corporation that can be employed based on the specific needs and preferences of the shareholders. Below are some different types: 1. Proportional Income Share Agreement: This type of agreement distributes dividends in proportion to each shareholder's ownership percentage in the close corporation. It adheres to the principle of reflecting ownership stakes in the allocation of profits. 2. Fixed Dividend Share Agreement: In this agreement, shareholders receive a predetermined fixed dividend amount, regardless of their ownership percentage. This ensures consistent and stable dividend payouts for shareholders, irrespective of fluctuations in profits or ownership changes. 3. Equity-Based Dividend Share Agreement: This type of agreement allocates dividends based on the shareholders' contribution to the corporation's equity. It considers factors such as capital investment, intellectual property, or expertise, and rewards shareholders accordingly. 4. Performance-Based Dividend Share Agreement: This agreement links dividend allocations to the individual or collective performance of shareholders. Various performance metrics, such as sales targets, profitability ratios, or achieving specific milestones, can be used to determine the dividend share of each shareholder. 5. Founder/Management Dividend Share Agreement: In close corporations where founding members or key management personnel hold significant roles, this type of agreement may provide them with a higher dividend share as a reward for their expertise, efforts, or entrepreneurial vision. Regardless of the specific type, a Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation in New Mexico typically addresses various aspects. These include the process for determining dividend amounts, the frequency of dividend payouts, mechanisms for dispute resolution, restrictions on transfer of shares, terms for exiting shareholders, voting rights, and other governance matters. Consulting legal professionals well-versed in New Mexico corporate law is advisable to draft and customize the Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation, ensuring compliance with state regulations and addressing the unique needs and preferences of the shareholders involved.