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New York Business Corporations Law Section 510 - Dividends Or Other Distributions In Cash Or Property.

Legal Research Home > New York Lawyer > Business Corporations > New York Business Corporations Law Section 510 - Dividends Or Other Distributions In Cash Or Property.

  § 510. Dividends or other distributions in cash or property.
    (a)  A  corporation  may  declare  and  pay  dividends  or  make other
  distributions in cash or its bonds or its property, including the shares
  or bonds of other corporations, on its outstanding shares,  except  when
  currently  the  corporation  is  insolvent  or  would  thereby  be  made
  insolvent, or when the declaration, payment  or  distribution  would  be
  contrary   to   any   restrictions   contained  in  the  certificate  of
  incorporation.
    (b) Dividends may be declared or paid and other distributions  may  be
  made  out  of  surplus  only,  so that the net assets of the corporation
  remaining after such declaration, payment or distribution shall at least
  equal the amount of  its  stated  capital;  except  that  a  corporation
  engaged  in  the  exploitation  of  natural  resources  or other wasting
  assets, including patents, or formed primarily for  the  liquidation  of
  specific   assets,   may   declare  and  pay  dividends  or  make  other
  distributions in excess  of  its  surplus,  computed  after  taking  due
  account  of  depletion  and amortization, to the extent that the cost of
  the wasting or specific assets has been recovered by depletion reserves,
  amortization or sale, if the net assets remaining after  such  dividends
  or  distributions are sufficient to cover the liquidation preferences of
  shares having such preferences in involuntary liquidation.

Last modified: August 10, 2006