§ 2-304. Application of capital surplus

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   (a) Permitted uses. -- By resolution of its board of directors, a corporation may apply any part of its capital surplus for:

   (1) The reduction or elimination of a corporate deficit arising from a loss, however incurred, or from diminution in the value of its assets, but only after earned surplus is exhausted; or

   (2) Any other proper corporate purpose.

(b) Disclosure to stockholders. -- An application of capital surplus under subsection (a) of this section shall be disclosed to the stockholders of the corporation in its next annual report.

HISTORY: An. Code 1957, art. 23, § 25; 1975, ch. 311, § 2.

                    
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