Does a reverse stock split affect authorized shares?

Reverse stock splits don't affect the number of authorized shares, but a forward stock split issues new stock from the company's authorized shares. When new shares are issued by a company, it adds to the number of outstanding shares and reduces each shareholder's percentage of ownership in the company.

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Oakland Michigan Proposal to amend certificate of incorporation to effectuate a one for ten reverse stock split

Name: Oakland Michigan Proposal to amend certificate of incorporation to effectuate a one for ten reverse stock split
Brand: US Legal Forms
Rating: 4.87 (298 reviews)

Category:

Corporations - Public - Changes Affecting Capital Stock

State:

Multi-State

County:

Oakland

Control #:

US-CC-3-213B

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Instant download

Description

This sample form, a detailed Proposal to Amend Certificate of Incorporation to Effectuate a One-for-Ten Reverse Stock Split document, is a model for use in corporate matters. The language is easily adapted to fit your specific circumstances. Available in several standard formats.

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How to fill out Oakland Michigan Proposal To Amend Certificate Of Incorporation To Effectuate A One For Ten Reverse Stock Split?

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FAQ

A reverse stock split occurs when a publicly traded company divides the number of outstanding shares by a certain amount. This serves to decrease the number of outstanding shares and increase the price per share of those outstanding shares.

Per-share price bumping is the primary reason why companies opt for reverse stock splits, and the associated ratios may range from 1-for-2 to as high as 1-for-100. Reverse stock splits do not impact a corporation's value, although they are usually a result of its stock having shed substantial value.

In some reverse stock splits, small shareholders are "cashed out" (receiving a proportionate amount of cash in lieu of partial shares) so that they no longer own the company's shares. Investors may lose money as a result of fluctuations in trading prices following reverse stock splits.

Key Takeaways. A company performs a reverse stock split to boost its stock price by decreasing the number of shares outstanding. A reverse stock split has no inherent effect on the company's value, with market capitalization remaining the same after it's executed.

Although the SEC has authority over a broad range of corporate activity, state corporate law and a company's articles of incorporation and by-laws generally govern the company's ability to declare a reverse stock split and whether shareholder approval is required.

What is required should an issuer choose to do a reverse stock split? Generally, a public company can declare a reverse split if it obtains the approval of its board of directors. Most often shareholder approval is not required.

Generally, the split must be approved by either the board of directors or shareholders, depending on the company's bylaws and state corporate law. Public companies that file with the SEC can notify shareholders about an upcoming reverse stock split with a proxy statement on forms 8-K, 10-Q, or 10-K.

For example: For a 1-for-2 reverse stock split, enter 1 in the New Shares field and 2 in the Old Shares field. Open the account you want to use. Click Enter Transactions. In the Enter Transaction list, select Stock Split. Use this dialog to record the split. Click a link below for more information. Transaction date.

What is FINRA's role? FINRA does not approve reverse splits, but it does process reverse stock splits as part of its functions related to company corporate actions in the OTC market. OTC companies must submit notice to FINRA 10 days prior to the record/effective date of the corporate action.

Reverse stock splits don't affect the number of authorized shares, but a forward stock split issues new stock from the company's authorized shares. When new shares are issued by a company, it adds to the number of outstanding shares and reduces each shareholder's percentage of ownership in the company.

Oakland Michigan Proposal to amend certificate of incorporation to effectuate a one for ten reverse stock split

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What happens in a reverse stock split?

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Do you lose money on a reverse split?

Why do companies do reverse stock splits?

Does a reverse stock split require SEC approval?

Do shareholders have to approve a reverse stock split?

Who approves a reverse stock split?

How do you record a reverse stock split?

Does a stock split require finra approval?

Does a reverse stock split affect authorized shares?

Interesting Questions

What is the Oakland Proposal?

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