Illinois Proposed amendment to Article 4 of certificate of incorporation to authorize issuance of preferred stock with copy of amendment

• Category: Corporations - Public - Changes Affecting Capital Stock
• State: Multi-State
• Control #: US-CC-3-123
• Format: Word; Rich Text

Description

This sample form, a detailed Proposed Amendment to Article 4 of Certificate of Incorporation to Authorize Issuance of Preferred Stock w/Copy of Amendment document, is a model for use in corporate matters. The language is easily adapted to fit your specific circumstances. Available in several standard formats.

Illinois Proposed Amendment to Article 4 of Certificate of Incorporation to Authorize Issuance of Preferred Stock The Illinois proposed amendment to Article 4 of the certificate of incorporation seeks to authorize the issuance of preferred stock by a corporation. This significant change in corporate governance broadens the financial options available to businesses and provides a means for attracting investments and raising capital. Preferred stock, as opposed to common stock, offers certain advantages to both the issuing corporation and potential investors. This class of stock typically grants shareholders preferential treatment in terms of dividends and liquidation proceeds, allowing them to receive a fixed income stream before any distributions are made to common stockholders. Additionally, preferred stockholders often possess voting rights, albeit limited, allowing them to have a say in certain corporate matters. The proposed amendment aims to provide corporations in Illinois with the flexibility to tailor their capital structure to their specific needs. By including preferred stock as an option, corporations can attract a wider pool of investors who may be more inclined to invest in businesses offering a fixed income stream and greater protection in the event of liquidation. The Illinois proposed amendment to Article 4 allows corporations to issue different types of preferred stock, each with its own unique characteristics. These types may include: 1. Cumulative Preferred Stock: This type of preferred stock grants shareholders the right to accumulate unpaid dividends. If dividends are not paid in a given year, they accrue and must be paid before any future dividends are distributed to common stockholders. 2. Convertible Preferred Stock: This type of preferred stock provides holders with the option to convert their shares into a specified number of common stock shares. This can be an attractive feature for investors as it allows them to potentially participate in any capital appreciation of the common stock while still enjoying the benefits of preferred stock. 3. Participating Preferred Stock: With participating preferred stock, shareholders receive preferential treatment regarding dividends and liquidation proceeds. Additionally, holders of participating preferred stock are entitled to share in any remaining profits with the common stockholders, usually on a pro rata basis after a certain threshold is reached. The proposed amendment empowers Illinois corporations to use preferred stock as a strategic tool to meet their capital requirements, attract investors, and drive growth. By including various types of preferred stock, the amendment grants corporations the ability to tailor their funding options to suit their business objectives and appeal to different investor preferences. [Insert copy of the Illinois proposed amendment to Article 4 of certificate of incorporation here] Keywords: Illinois, proposed amendment, Article 4, certificate of incorporation, authorize issuance, preferred stock, corporate governance, financial options, investments, raising capital, common stock, advantages, dividends, liquidation, fixed income stream, voting rights, pool of investors, capital structure, cumulative preferred stock, convertible preferred stock, participating preferred stock, capital appreciation, pro rata basis, strategic tool, funding options, business objectives, investor preferences.