The Pennsylvania Resolution of Directors of a Close Corporation Authorizing Redemption of Stock is a legal document that outlines the procedure and conditions for a close corporation to redeem its stocks. In this resolution, the directors of a close corporation, also known as a closely-held corporation, authorize the redemption of shares from a shareholder. The resolution typically includes the following key elements: 1. Introduction: The resolution begins with the identification of the corporation and its board of directors. It states the purpose of the resolution, which is to authorize the redemption of stock. 2. Shareholder Information: The resolution specifies the name(s) of the shareholder(s) whose stock is being redeemed. It may also include the number and class of shares being redeemed. 3. Basis for Redemption: The resolution explains the reasons for the redemption of stock, such as retirement, termination of employment, voluntary withdrawal, or any other applicable circumstance. It may mention the provision in the corporation's bylaws or shareholder agreement that allows for the redemption. 4. Redemption Price: The resolution states the agreed-upon price or formula for determining the redemption price of the shares. This price can be based on the fair market value, book value, or a predetermined formula outlined in the corporation's governing documents. 5. Payment Terms: The resolution outlines the payment terms, including the time of payment, any installments or lump sum payment, and any applicable interest rates or penalties for late payment. 6. Voting Approval: The resolution confirms that the directors have unanimously agreed to authorize the redemption and have taken a vote during a board meeting. It may also require the consent of a certain percentage of the shareholders for the redemption to proceed. 7. Execution: The resolution includes the signatures of the directors, attesting to their agreement and authorization to redeem the shares. The date of the resolution's adoption is also included. Different types of Pennsylvania Resolution of Directors of a Close Corporation Authorizing Redemption of Stock may exist, depending on the specific circumstances of the redemption. Some examples include: 1. Stock Redemption Upon Retirement: This resolution authorizes the redemption of a shareholder's stock upon their retirement from the close corporation. 2. Stock Redemption Upon Termination of Employment: This resolution allows for the redemption of a shareholder's stock if their employment with the corporation is terminated, whether voluntarily or involuntarily. 3. Stock Redemption for Voluntary Withdrawal: This type of resolution authorizes the redemption of a shareholder's stock if they voluntarily decide to withdraw from the close corporation. 4. Stock Redemption for Shareholder Buyout: In cases where one or more shareholders want to buy out another shareholder, a resolution will outline the terms and conditions for the redemption of the stock involved in the buyout. These resolutions serve to ensure that the redemption process is carried out in a fair and transparent manner, protecting the interests of both the corporation and its shareholders.
Pennsylvania Resolution of Directors of a Close Corporation Authorizing Redemption of Stock
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