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34 (Ownership interest (Debt (No), Preferred Stock (Yes), Common Stock…
34
Ownership interest
Debt
No
Preferred Stock
Yes
Common Stock
Yes
Obligation to repay principal/pay income/Fixed Maturity
Debt
Yes
Preferred Stock
No
Common Stock
No
Preference of Income/Liquidation
Debt
Yes
Preferred Stock
Yes
Common Stock
No
Preemptive Rights
rights to buy a pro rata share of new stock offerring
Prevents dilution
Amount of Consideration
Deemed fully paid and nonassessble when issued
Must at least be par value
SH right to compel distribution
Declaration is based on BoD judgement
Once declared, distribution is considered a debt
Liability for Improper Dividends
Director
Breaching
Liable regardless of solvency
Non Breaching
Not Liable regardless of solvency
Solvency do not matter
Shareholder
Knowing
Liable regardless of solvency
Innocent
Only liable if insolvent
Liability is only to return the dividends
Solvency only matters for innocent shareholder