A shareholder's obligation to repay an illegally declared dividend depends on:
A) the shareholder's good or bad faith in accepting the dividend.
B) the solvency or insolvency of the corporation and,in some instances,special statutory provisions.
C) the shareholder's knowledge of the facts.
D) All of these.

Question

Quizplus · Accepted Answer

All of these factors can influence a shareholder's obligation to repay an illegally declared dividend. Good or bad faith in accepting the dividend, the corporation's financial status (solvency or insolvency), and the shareholder's knowledge of the situation can all be relevant in determining the obligation to repay. Additionally, specific statutory provisions may also play a role.

A Shareholder's Obligation to Repay an Illegally Declared Dividend Depends