Nashville Real Estate Attorneys & Lawyers

What Are Cumulative Dividends?

If a dividend is sharing company profits to shareholders, then a cumulative dividend is a distribution made to the holders of special "preferred" shares regularly. It is unrelated to company profits.

Regular or "noncumulative" dividends are voluntary. This means the Board of Directors has the option of awarding them. This usually depends on how the company has performed each year.

However, paying cumulative dividends is mandatory. If the company can't pay out a cumulative dividend in any given fiscal year, the amount for that year is carried forward. It must always be paid out before any payments to common shareholders.

Not all "preferred shares" have the right to receive cumulative dividends. Some cumulative preferred shares carry limitations. For example, the company may only have to pay cumulative dividends if it liquidates. In addition, paying out cumulative dividends doesn't ta

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Key Takeaways:

• Definition and Purpose: MSAs establish foundational terms for ongoing business relationships, streamlining processes and reducing repetitive negotiations.
• Key Components:
  • Payment terms (e.g., Net30, Net60)
  • Service level agreements (SLAs)
  • Intellectual property rights
  • Confidentiality and risk allocation
• Enterprise Considerations: Monthly billing cycles and extended payment terms are often preferred by large clients for practicality.
• Legal Importance: Professional legal counsel ensures MSAs are tailored to unique business needs while protecting all parties' interests.
• Business Benefits:
  • Simplified contract administration
  • Protected intellectual property
  • Reliable cash flow and operational efficiency
• Risk Management:

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A commercial lease for office or retail space is a serious commitment for your business. They are typically long-term contracts lasting at least five years, the rent is often your second-biggest monthly expense after payroll, and the rights and limitations in your lease agreement have major effects on your ability to expand, contract and relocate your business.

Companies large and small can make major mistakes when planning for new space and negotiating the lease - these are the most common.

1. Not Allocating Enough Time

Conventional wisdom in the commercial real estate industry is to allow six to 12 months to complete a deal for less than 10,000 square feet and nine to 18 months for larger deals. The lead time is required for the various complicated steps in any business relocation - due diligence of possible locations, negotiation of the lease, planning and design of your new space with an architect and engineer, bi

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What is a Portfolio Company?

A portfolio company is a term used to describe a company in which investors own equity in a company or buy out a company. The goal of the investor is to increase the value of the portfolio company and earn a return on their initial investment.

The investment could be in the form of private equity in established companies or venture capital in companies just starting out. One portfolio company usually forms part of a group of companies in the investor's full portfolio.

Who Invests in Portfolio Companies?

Portfolio companies are used by venture capital firms, private equity firms, and other financial investment firms. Some firms build a portfolio of companies that specialize in a specific sector, such as science or engineering. Others have a diverse mix of portfolios.

Private Equity Firms: Private equity is a type of financ

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Key Takeaways

• Capital stock refers to the total shares a corporation is authorized to issue, encompassing both common and preferred stock.
• It is distinct from outstanding shares, which represent what has actually been issued and purchased.
• Par value and additional paid-in capital are key accounting components used in calculating the book value of capital stock.
• Issuing capital stock helps corporations raise capital without incurring debt but may dilute ownership and control.
• Capital stock plays a role in corporate governance, ownership rights, and investor expectations, especially regarding dividends and liquidation.
• The types, rights, and issuance rules tied to capital stock are governed by a corporation’s charter and state corporate law.
• Shareholders can assert voting rights, income claims, and liquidation preferences depending on the stock class they own.

What is Capital Stock?

Capital stock

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