Missouri Laws 351.220 – Payment of dividends on shares of stock
The board of directors of a corporation may declare and the corporation may pay dividends on its shares in cash, property, or its own shares, subject to the following limitations and provisions:
(1) No dividend shall be declared or paid at a time when the net assets of the corporation are less than its stated capital or when the payment thereof would reduce the net assets of the corporation below its stated capital;
Terms Used In Missouri Laws 351.220
- Articles of incorporation: includes the original articles of incorporation and all amendments thereto, and includes articles of merger or consolidation. See Missouri Laws 351.015
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- following: when used by way of reference to any section of the statutes, mean the section next preceding or next following that in which the reference is made, unless some other section is expressly designated in the reference. See Missouri Laws 1.020
- Net assets: for the purpose of determining the right of a corporation to purchase its own shares and of determining the right of a corporation to declare and pay dividends and the liabilities of directors therefor, shall not include shares of its own stock belonging to a corporation. See Missouri Laws 351.015
- Paid-in surplus: means all that part of the consideration received by the corporation for, or on account of, all shares issued which does not constitute stated capital minus such formal reductions from said sum as may have been effected in a manner permitted by this chapter. See Missouri Laws 351.015
- Property: includes real and personal property. See Missouri Laws 1.020
- Stated capital: means at any particular time the sum of:
(a) The par value of all shares then issued having a par value. See Missouri Laws 351.015
(2) If a dividend is declared out of the paid-in surplus of the corporation, 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 par value, such shares shall be issued at the par value thereof and there shall be transferred to stated capital at the time such dividend is declared an amount of surplus equal to the aggregate par value of the shares to be issued as a dividend;
(4) If a dividend is declared payable in its own shares, without par value, and such shares have a preferential right in the assets of the corporation in the event of its involuntary liquidation, such shares shall be issued at the liquidation value thereof, and there shall be transferred to stated capital at the time such dividend is declared, an amount of surplus equal to the aggregate preferential amount payable upon such shares in the event of involuntary liquidation;
(5) If a dividend is declared payable in its own shares without par value and none of such shares has a preferential right in the assets of the corporation in the event of its involuntary liquidation, such shares shall be issued at such value as shall be fixed by the board of directors by resolution at the time such dividend is declared, and there shall be transferred to stated capital, at the time such dividend is declared, an amount of surplus equal to the aggregate value so fixed in respect of such shares, and the amount per share transferred to stated capital shall be disclosed to the shareholders receiving such dividends concurrently with payment thereof;
(6) A split-up or division of issued shares into a greater number of shares of the same class shall not be construed to be a share dividend within the meaning of this section;
(7) No dividend shall be declared or paid contrary to any restrictions contained in the articles of incorporation.