Hans receives a dividend from his closely held corporation, causing the company to go insolvent. He was aware of the fact that the dividend would result in insolvency. Which of the following is true?
A) He is not liable, because shareholders are protected from liability
B) He is liable for losses to the extent of his investment.
C) He is personally liable and must return the funds to the corporation
D) He is liable only if he was a director
E) He is liable because he violated the business judgment rule.
Correct Answer:
Verified
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