Also known as: reinvest · reinvests · reinvested · reinvesting · reinvestments · re-investment
Written by attorneys · grounded in primary & secondary sources — see below
2 senses
A corporate power authorizing a business entity to place its funds into new investments after an initial outlay. The power permits ongoing management of corporate assets through repeated investment decisions.
A corporate power authorizing a business entity to place its funds into new investments after an initial outlay. The power permits ongoing management of corporate assets through repeated investment decisions.
Select any source to read its text and confirm it supports the definition.
Additional securities obtained when dividends or distributions are automatically used to purchase more shares of the same issuer. Such shares pass with a specific devise of the original securities under accession rules.
Select any source to read its text and confirm it supports the definition.
Additional securities obtained when dividends or distributions are automatically used to purchase more shares of the same issuer. Such shares pass with a specific devise of the original securities under accession rules.
Each sense below has its own examples, sources, and questions.
Raven Logistics receives a large prepayment from a customer for a multiyear software contract. Its managers decide to place the entire sum into a new AI development venture rather than issue any cash distributions to owners. The decision is later challenged by limited partners seeking immediate payouts.
Yes. The partnership agreement is the primary source of law for internal affairs, including how profits are allocated and whether they are reinvested or distributed. Statutory default rules apply only when the agreement is silent on the subject.
Supporting sources
Yes, provided the partnership agreement permits the practice and the decision does not violate any nonwaivable statutory limits. The agreement governs economic rights, and dissociation alone does not create a right to an immediate distribution.
Supporting sources
The court may foreclose the charging order and order a sale of the debtor partner's transferable interest when the reinvestment policy prevents distributions from satisfying the judgment within a reasonable time.
Supporting sources
Professor Elena Vargas's will leaves 600 shares of Liberty Education to her niece Josiah. Vargas later enrolls in the company's automatic dividend-reinvestment plan, and all cash dividends purchase additional shares. At death the plan has acquired 150 more shares of the same stock.
The trustees of a large charitable fund receive the corpus in the form of existing corporate shares. Rather than sell the shares and buy new ones, they retain and manage the holdings to generate income while preserving principal value for the beneficiaries.
The trustee of a residuary trust receives directions to invest and reinvest the entire trust estate. The trustee places proceeds from maturing bonds into new securities that produce steady income for the income beneficiaries while protecting the remainder interest.
Intermediaries hold securities in nominee name for beneficial owners and offer dividend reinvestment programs. Book entries record the purchase of additional shares when dividends are reinvested, allowing seamless changes in beneficial ownership without physical certificate transfers.
The directors of an automobile manufacturer accumulate large profits but decline to declare dividends. They instead direct the funds toward plant expansion and new production capacity, asserting that long-term growth will ultimately benefit all shareholders.
The devise includes those shares when the testator enrolled in an automatic plan that uses dividends to purchase additional shares of the same issuer. The accession rule treats the new shares as flowing directly from ownership of the original securities.
Supporting sources
…his livelihood. Thus, he cannot afford to wait passively. He must liquidate his investment in the close corporation in order to reinvest the funds in income-producing enterprises. At this point, the true plight of the minority stockholder in a close corporation becomes manifest. He cannot easily reclaim his capital. In a…