Transportation service provider YRC Worldwide recently announced that its stockholders have approved an amended certificate of incorporation owners proposed. The amendments will increase the amount of shares of common stock, thereby reducing the value of each shareholder’s ownership of the company.
The generous shareholders also voted to allow the company’s board of directors to use their discretion to reduce the authorized shares of common stock later this year. While this may not seem like the best move for shareholders, the vote keeps the company’s best interest in mind.
“This stockholder approval satisfies an important condition to closing our recently announced agreement for a private placement of $70 million in new convertible notes,” said Bill Zollars, chairman and CEO of YRC Worldwide. “We thank our stockholders for their support.”
Increasing the amount of shares of common stock seems to be a trend; Benhihana recently did the same. However, Benihana was not required to let shareholders vote on the matter because of a provision in their certificate of incorporation.
For those considering business formation, it could be wise to file certificates of incorporation that limit the powers of shareholders. To learn more about how to incorporate a business, entrepreneurs can ask professionals at an incorporation service.