Harlan Lunsford <hlunsford[at]bellsouth.net> wrote:
- quote -

Wow! Something right from a lawyer???
From California???

Harlan, you're getting soft. ;-)

Stu

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Stuart A. Bronstein wrote:
- quote -

Most states, if not all, subscribe to the Model Corporations
Act, don't they? So I would think this is a pretty good
answer. Anyway, that's the way I learned it.

ChEAr$,
Harlan Lunsford, EA n LA
Sun 20 Mar 2005

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Mark3324 wrote:

- quote -

What a "retired" share really means is not an accounting
question. It is a corporate law question. The accounting
treatment follows from the corporate law.

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

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Mark3324 <user[at]domain.invalid> wrote:

- quote -

What you are asking is a legal question, not a tax or even
an accounting question.

I don't practice in Nevada, so I can say with certainty. In
California when shares are "retired" they revert to
authorized but unissued status. So they are available to
again be issued later if all the appropriate legal
requirements are met.

Stu

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I understand about amending the articles of incorp. And I
understand why you would ask, "why would you want to do
this?"

But I thought the question was a one of accounting practice,
and what a "retired" share really means.

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Mark3324 wrote:

- quote -

This is a question of corporate law, not a tax question, so
it really doesn't belong here.

My guess is that you would have to amend the articles of
incorporation to provide for additional authorized stock; in
other words, you could not reissue the stock that was
retired. But what do I know <G> ? You need to ask a Nevada
lawyer.

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

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Since this is not a tax question, I -- as a non tax person
-- will respond.

Just what would be accomplished by this? It would appear
that the outstanding stock position would be the same as it
was prior to the buy-back.

Stock buy-backs are usually done following the issuance of
new ~additional~ shares utilized to purchase or "merge with"
another company. The purpose is to reduce the total shares
outstanding, thus decreasing the dilution of the purchasing
company's shares.

Other buy-backs of non inflated shares are done to reduce
the total number of outstanding shares in hopes of causing
an increase in share price. This sometimes occurs when a
company is flush with cash and does not want to expand.

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"Mark3324" <user[at]domain.invalid> wrote:

- quote -

That's a legal, not a tax question. But I think that the
corporation needs to amend their articles of incorporation
to increase the number of authorized shares.

--
Tom Healy, CPA
Boulder, CO
Web: http://www.tomhealycpa.com

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This has to do with Nevada corp, if it matters...

First of all, it's my understanding that in accounting
practice, a share that is bought back and "retired" is
removed from circulation forever. It does not even go back
to the treasury.

If that is correct, then here is my question: Say the
corporation has 1000 shared authorized. All 1000 are in
circulation. They buy back 500 and retired them. Can the
corp issue a new set of 500?

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