Corporations Code section 7412


Neither a corporation nor any of its subsidiaries shall make a distribution 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 7412, https://leginfo.­legislature.­ca.­gov/faces/codes_displaySection.­xhtml?lawCode=CORP§ionNum=7412.­ (updated Jan. 1, 1978; accessed Jun. 30, 2025).

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Verified:
Jun. 30, 2025

§ 7412's source at ca​.gov