Texas 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 Texas Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation is a legally binding document that outlines the distribution of profits in a close corporation based on certain predetermined allocations. It is essential for shareholders in Texas close corporations to understand and establish an agreement to mitigate potential disputes and ensure fair treatment. This type of agreement recognizes the unique nature of close corporations, where shareholders are usually actively involved in the company's management. By having a clear understanding of how dividends will be allocated among shareholders, parties can avoid disagreements and protect their interests. There are two primary types of Texas Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation: 1. Fixed Allocation Agreement: This agreement specifies a fixed percentage or share of dividends that each shareholder will receive. For example, if there are three shareholders and the agreement states a fixed allocation of 40%, 30%, and 30%, the dividends will be distributed accordingly. This type of agreement provides a straightforward and predictable distribution of profits. 2. Formula Allocation Agreement: This agreement allocates dividends based on a predetermined formula that may take into account various factors such as ownership stake, capital contributions, or preferred stock status. The formula can be customized to reflect the unique circumstances of the close corporation and the specific needs of the shareholders. By using a formula, this type of agreement allows for more flexibility and adaptability to changing circumstances. Other relevant keywords for a Texas Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation could include: — Dividendistributionio— - Dividend allocation — Shareholder right— - Close corporation agreement — Profidistributionio— - Close corporation management — Shareholder dispute— - Shareholder equality — Shareholder equit— - Corporate governance It is worth noting that while this content provides an overview of the topic, it is always advisable to seek legal counsel to ensure compliance with the specific laws and regulations governing close corporations in Texas.

A Texas Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation is a legally binding document that outlines the distribution of profits in a close corporation based on certain predetermined allocations. It is essential for shareholders in Texas close corporations to understand and establish an agreement to mitigate potential disputes and ensure fair treatment. This type of agreement recognizes the unique nature of close corporations, where shareholders are usually actively involved in the company's management. By having a clear understanding of how dividends will be allocated among shareholders, parties can avoid disagreements and protect their interests. There are two primary types of Texas Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation: 1. Fixed Allocation Agreement: This agreement specifies a fixed percentage or share of dividends that each shareholder will receive. For example, if there are three shareholders and the agreement states a fixed allocation of 40%, 30%, and 30%, the dividends will be distributed accordingly. This type of agreement provides a straightforward and predictable distribution of profits. 2. Formula Allocation Agreement: This agreement allocates dividends based on a predetermined formula that may take into account various factors such as ownership stake, capital contributions, or preferred stock status. The formula can be customized to reflect the unique circumstances of the close corporation and the specific needs of the shareholders. By using a formula, this type of agreement allows for more flexibility and adaptability to changing circumstances. Other relevant keywords for a Texas Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation could include: — Dividendistributionio— - Dividend allocation — Shareholder right— - Close corporation agreement — Profidistributionio— - Close corporation management — Shareholder dispute— - Shareholder equality — Shareholder equit— - Corporate governance It is worth noting that while this content provides an overview of the topic, it is always advisable to seek legal counsel to ensure compliance with the specific laws and regulations governing close corporations in Texas.