Louisiana Revised Statutes 12:216 – Redemption, purchase and cancellation of shares
Terms Used In Louisiana Revised Statutes 12:216
- Allocated value: means (1) the par value of par-value shares, plus any amounts in excess of par value transferred from surplus to stated capital in respect of such shares, less any part of such amounts transferred from stated capital to capital surplus as permitted by this Chapter, and (2) the amount allocated to stated capital upon issuance of shares without par value, plus any amounts thereafter transferred from surplus to stated capital in respect of such shares, less any part of such amounts transferred from stated capital to capital surplus as permitted by this Chapter. See Louisiana Revised Statutes 12:201
- Articles: means the original articles of incorporation, and all amendments thereto including those contained in merger agreements, or if restated, the latest restatement thereof, except in those instances in which the context expressly refers to the original articles of incorporation only. See Louisiana Revised Statutes 12:201
- Assets: means all of a corporation's property and rights of every kind. See Louisiana Revised Statutes 12:201
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Issued shares: means outstanding shares and treasury shares. See Louisiana Revised Statutes 12:201
- Net assets: means the excess of assets over liabilities. See Louisiana Revised Statutes 12:201
- Share: means an interest in a corporation, represented by a stock certificate issued after payment for the shares represented thereby, entitling the holder thereof to participate in the control of the corporation or to a pro rata share of its net assets upon dissolution. See Louisiana Revised Statutes 12:201
- Stated capital: means the aggregate amount of:
(a) The aggregate allocated value of the issued shares; and
(b) Any other amounts transferred from surplus to stated capital; less
(c) Transfers from, or other reductions in, stated capital required or permitted by this Chapter. See Louisiana Revised Statutes 12:201
- Surplus: means the excess of assets over liabilities plus stated capital. See Louisiana Revised Statutes 12:201
- Voting power: means the right vested, by law or by the articles or the by-laws, in the members, or in one or more classes of members, to vote in the determination of any particular question or matter coming before meetings of the members. See Louisiana Revised Statutes 12:201
A. A corporation shall not purchase or redeem its shares when it is insolvent; or when such purchase or redemption would render it insolvent or would reduce its net assets below the aggregate amount payable on liquidation upon any issued shares, which have a preferential right to participate in the assets in event of liquidation, remaining after the purchase or redemption and cancellation of any shares in connection therewith; or at a price, in the case of shares subject to redemption, exceeding the redemption price thereof; or, except when authorized by the articles, unless a purchase of its shares has been authorized by affirmative vote of two-thirds in interest of the members of each class, regardless of limitations or restrictions on the voting power of any of such classes. Subject to the provisions of this subsection, a corporation may purchase its own shares, or redeem its shares subject to redemption, as provided in the following subsections of this section.
B. Subject to the provisions of La. Rev. Stat. 12:221(F), a corporation may purchase its own shares, or redeem its shares subject to redemption, out of surplus; provided that a corporation which is not permitted to distribute net assets to its members or shareholders on dissolution shall not pay any premium in connection with the redemption or purchase of its own shares, but shall pay not more than the consideration received by it upon issuance of each share redeemed or purchased.
C. To the extent that there is no surplus available for the purpose, a corporation may apply, to the redemption of its shares subject to redemption, such amount out of stated capital as will not reduce stated capital below the aggregate allocated value of the issued shares remaining after the redemption and cancellation of any shares in connection therewith.
D. To the extent that there is no surplus available for the purpose, a corporation may purchase its own shares out of stated capital for the purpose of paying dissenting shareholders entitled to payment for their shares under the provisions of this Chapter. Shares so purchased out of stated capital shall be cancelled.
E. To the extent that there is no surplus available for the purpose, a corporation may apply to the purchase of its shares:
(1) For the purpose of eliminating fractions of shares; or
(2) For the purpose of collecting or compromising indebtedness to the corporation;
such amount out of stated capital as will not reduce stated capital below the aggregate allocated value of the issued shares remaining after the purchase and cancellation of any shares in connection therewith.
F. Shares which are cancelled are thereby restored to the status of authorized and unissued shares, unless the articles provide otherwise.
Acts 1968, No. 105, §1.