Corporations Code section 501

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.

Source: Section 501, https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP§ionNum=501. (updated Jan. 1, 1975; accessed Jun. 9, 2025).

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Last Updated

Jan. 1, 1975

§ 501’s source at ca.gov

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Location: https://california.public.law/codes/corporations_code_section_501

Original Source: Section 501, https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP§ionNum=501. (last accessed May 12, 2025).