Common use of Limitations on Company Action Clause in Contracts

Limitations on Company Action. The company may not, without approval of the members holding at least 75% of the ownership shares, take any action that would result in its failure to qualify as an S corporation, including without limitation, the issuance of a second class of ownership shares, issuance of shares to more than 100 members, or issuance of shares to a person who is not eligible to own stock of an S corporation.

Limitations on Company Action. The company Company may not, without approval of the members Members holding at least seventy­five percent (75% %) of the ownership sharesinterests, take any action that would result in its failure to qualify as an S corporation, including without limitation, the issuance of a second class of ownership sharesinterests, issuance of shares to more than 100 membersone hundred (100) Members, or issuance of shares to a person who is not eligible to own stock of an S corporation.