12 U.S.C. § 626 — Dividends; surplus fund

submitted 113 years ago by ch. 6 to r/title-12-BANKS-AND-BANKING · 70 words · no verdicts yet

in plain englishAI-generated · not legal advice

Directors may declare dividends twice a year, but must first transfer part of recent profits to the surplus fund until it reaches the required size.

The directors may declare a dividend twice a year from as much of the corporation’s net profits as they think appropriate. Before declaring a dividend, the corporation must transfer one-tenth of its net profits from the preceding six months to its surplus fund. It must continue doing this until the surplus fund equals 20 percent of its capital stock.

the actual law source: uscode.house.gov ↗public domain

The directors of any corporation organized under the provisions of this subchapter may, semiannually, declare a dividend of so much of the net profits of the corporation as they shall judge expedient; but each corporation shall, before the declaration of a dividend, carry one-tenth of its net profits of the preceding half year to its surplus fund until the same shall amount to 20 per centum of its capital stock.

Source credit: (Dec. 23, 1913, ch. 6, § 25A (par.), formerly § 25(a), as added Dec. 24, 1919, ch. 18, 41 Stat. 378; renumbered § 25A, Pub. L. 102–242, title I, § 142(e)(2), Dec. 19, 1991, 105 Stat. 2281.)

history & why it existsrecord from the source credit

1913Enacted · Act of Dec. 23, 1913, ch. 6 · 41 Stat. 378
1991Amended · Pub. L. 102-242 · 105 Stat. 2281

A history note hasn’t been published yet. The record shows enactment by ch. 6 on 1913-12-23.

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