California Corporations Code Section 501

CA Corp Code § 501 (2017)  

Neither a corporation nor any of its subsidiaries shall make any distribution to the corporation’s shareholders (Section 166) if the corporation or the subsidiary making the distribution is, or as a result thereof would be, likely to be unable to meet its liabilities (except those whose payment is otherwise adequately provided for) as they mature.

(Repealed and added by Stats. 1975, Ch. 682.)

Last modified: October 25, 2018