351.220. Payment of dividends on shares of stock.
Payment of dividends on shares of stock.
351.220. The board of directors of a corporation may declare and thecorporation may pay dividends on its shares in cash, property, or its ownshares, subject to the following limitations and provisions:
(1) No dividend shall be declared or paid at a time when the netassets of the corporation are less than its stated capital or when thepayment thereof would reduce the net assets of the corporation below itsstated capital;
(2) If a dividend is declared out of the paid-in surplus of thecorporation, whether created by reduction of stated capital or otherwise,the limitations contained in section 351.210 shall apply;
(3) If a dividend is declared payable in its own shares having a parvalue, such shares shall be issued at the par value thereof and there shallbe transferred to stated capital at the time such dividend is declared anamount of surplus equal to the aggregate par value of the shares to beissued as a dividend;
(4) If a dividend is declared payable in its own shares, without parvalue, and such shares have a preferential right in the assets of thecorporation in the event of its involuntary liquidation, such shares shallbe issued at the liquidation value thereof, and there shall be transferredto stated capital at the time such dividend is declared, an amount ofsurplus equal to the aggregate preferential amount payable upon such sharesin the event of involuntary liquidation;
(5) If a dividend is declared payable in its own shares without parvalue and none of such shares has a preferential right in the assets of thecorporation in the event of its involuntary liquidation, such shares shallbe issued at such value as shall be fixed by the board of directors byresolution at the time such dividend is declared, and there shall betransferred to stated capital, at the time such dividend is declared, anamount of surplus equal to the aggregate value so fixed in respect of suchshares, and the amount per share transferred to stated capital shall bedisclosed to the shareholders receiving such dividends concurrently withpayment thereof;
(6) A split-up or division of issued shares into a greater number ofshares of the same class shall not be construed to be a share dividendwithin the meaning of this section;
(7) No dividend shall be declared or paid contrary to anyrestrictions contained in the articles of incorporation.
(L. 1943 p. 410 § 43, A.L. 1945 p. 696, A.L. 2001 S.B. 288)Effective 7-01-01