Oregon Statutes 60.181 – Distributions to shareholders
(1) A board of directors may authorize and the corporation may make distributions to its shareholders subject to restriction by the articles of incorporation and the limitation in subsection (3) of this section.
Terms Used In Oregon Statutes 60.181
- Articles of incorporation: means the articles described in ORS § 60. See Oregon Statutes 60.001
- 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.
- Distribution: means a direct or indirect transfer of money or other property, except of a corporation's own shares, or a corporation's incurrence of indebtedness to or for the benefit of the corporation's shareholders in respect of any of the corporation's shares, in the form of a declaration or payment of a dividend, a purchase, redemption or other acquisition of shares, a distribution of indebtedness, or otherwise. See Oregon Statutes 60.001
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Lien: A claim against real or personal property in satisfaction of a debt.
- Record date: means the date established under this chapter on which a corporation determines the identity of the corporation's shareholders and their shareholdings for purposes of this chapter. See Oregon Statutes 60.001
- Shareholder: means a person in whose name a share is registered in the records of a corporation or the beneficial owner of a share to the extent of the rights granted by a nominee certificate on file with a corporation. See Oregon Statutes 60.001
(2) If the board of directors does not fix the record date for determining shareholders entitled to a distribution, other than a date involving a purchase, redemption or other acquisition of the corporation’s shares, it is the date the board of directors authorizes the distribution.
(3) A distribution may be made only if, after giving it effect, in the judgment of the board of directors:
(a) The corporation would be able to pay its debts as they become due in the usual course of business; and
(b) The corporation’s total assets would at least equal the sum of its total liabilities plus, unless the articles of incorporation permit otherwise, the amount that would be needed if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution.
(4) The board of directors may base a determination that a distribution is not prohibited under subsection (3) of this section either on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances.
(5) The effect of a distribution under subsection (3) of this section is measured:
(a) In the case of distribution by purchase, redemption or other acquisition of the corporation’s shares, as of the earlier of the date the money or other property is transferred or debt incurred by the corporation or the date the shareholder ceases to be a shareholder with respect to the acquired shares;
(b) In the case of any other distribution of indebtedness, as of the date the indebtedness is distributed; and
(c) In all other cases, as of the date a distribution is authorized if the payment occurs within 120 days after the date of authorization or the date the payment is made if it occurs more than 120 days after the date of authorization.
(6) A corporation’s indebtedness to a shareholder incurred by reason of a distribution made in accordance with this section is at parity with the corporation’s indebtedness to its general unsecured creditors, unless the shareholder agrees to subordination or the corporation grants the shareholder a security interest or other lien against corporate assets to secure the indebtedness. [1987 c.52 § 48; 1989 c.1040 § 13]
SHAREHOLDERS
(Meetings)