Pennsylvania Proposal to amend certificate of incorporation to authorize a preferred stock

• Category: Corporations - Public - Changes Affecting Capital Stock
• State: Multi-State
• Control #: US-CC-3-141
• Format: Word; Rich Text

Description

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

Pennsylvania Proposal to Amend Certificate of Incorporation to Authorize a Preferred Stock In Pennsylvania, a proposal to amend the certificate of incorporation is being put forward with the aim of authorizing the creation and issuance of a preferred stock. The preferred stock is a type of equity security that grants certain privileges and preferences to its holders compared to common stockholders. This proposed amendment is aimed at granting the company additional flexibility in its capital structure by introducing a new class of shares. It provides an opportunity for the company to raise capital or attract potential investors who may be interested in the unique features and benefits offered by preferred stock. There are different types or variations of preferred stock that the proposed amendment might include. These variations introduce different terms, conditions, and specific rights granted to the preferred stockholders. Some common types of preferred stock are: 1. Cumulative Preferred Stock: This type of preferred stock accumulates dividends that are unpaid until they are fully redeemed. In the case of insufficient profits in a particular year, the unpaid dividends are carried forward to the following years and must be paid before any dividends can be distributed to common stockholders. 2. Convertible Preferred Stock: This type of preferred stock allows holders to convert their shares into a predetermined number of common stock shares. This feature provides the opportunity for preferred stockholders to potentially benefit from any future increase in the company's stock price. 3. Participating Preferred Stock: With participating preferred stock, holders are entitled to receive additional dividends beyond the fixed rate if the company performs exceptionally well. This type of preferred stock allows the holder to participate in the company's success, sharing in the profits with common stockholders. 4. Non-Cumulative Preferred Stock: Unlike cumulative preferred stock, non-cumulative preferred stock does not accumulate unpaid dividends. If the company skips payment of dividends in a particular year, these unpaid amounts are not required to be paid in future years. 5. Callable Preferred Stock: Callable preferred stock gives the company the right to redeem the shares at a specified price or after a certain period. This provides flexibility for the company to manage its capital structure effectively and potentially reduce its obligations in the future. By proposing this amendment to authorize the issuance of preferred stock, the company seeks to enhance its financial flexibility, attract potential investors, and adapt its capital structure to meet its current and future needs effectively. The introduction of different types of preferred stock allows the company the opportunity to tailor the terms and conditions to suit its specific objectives and requirements.