Oregon Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation

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Multi-State
Control #:
US-1085BG
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Word; 
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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.
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  • Preview Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation
  • Preview Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation
  • Preview Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation

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FAQ

As a shareholder, you own part of a company in relation to the proportion of shares you hold. A company can have just one shareholder or many shareholders. Each one is entitled to receive a portion of profits in relation to the number and value of their shares. Shareholders are commonly referred to as 'members'.

Since a shareholders' agreement establishes the relationship between the shareholders, without one, you are exposing both shareholders and the company to potential future conflict. This is particularly true in situations where the voting shares in a company are held equally (50% each) by just two people or companies.

A shareholder agreement, on the other hand, is optional. This document is often by and for shareholders, outlining certain rights and obligations. It can be most helpful when a corporation has a small number of active shareholders.

What happens with no shareholders' agreement? With no shareholders' agreement, both the company as a whole and individual shareholders could be exposed to unresolvable future conflict. Without an agreement to clarify the legal standpoint of each party, if a dispute occurs, a deadlock situation could occur.

(4) Dividends are payable to the shareholders in a no liability company in proportion to the number of shares held by them, irrespective of the amount paid up, or credited as paid up, on the shares.

A shareholder agreement, on the other hand, is optional. This document is often by and for shareholders, outlining certain rights and obligations. It can be most helpful when a corporation has a small number of active shareholders.

Obviously, a shareholder agreement is not necessary in a one-person corporation. However, consider entering into a shareholder agreement if you have more than one shareholder or when you want to bring in other investors as your business grows.

What Is a Shareholder? A shareholder, also referred to as a stockholder, is a person, company, or institution that owns at least one share of a company's stock, known as equity. Because shareholders essentially own the company, they reap the benefits of a business's success.

The Oregon Business Corporation Act includes laws and regulations for corporations doing business in the state of Oregon. By forming a corporation, the owner's personal assets aren't at risk for legal or financial issues relating to the business.

A shareholders' agreement (SHA) is a contract between a company's shareholders and often the company itself. A SHA specifies shareholders' rights and obligations, regulates the management of the company, ownership of shares, privileges, voting and various protective provisions for shareholders.

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Oregon Shareholders' Agreement with Special Allocation of Dividends among Shareholders in a Close Corporation