The MBCA as amended in 1980 and the Revised Act have adopted a net asset test for the issuance of dividends.

Question

Quizplus · Accepted Answer

Both the Model Business Corporation Act (MBCA) as amended in 1980 and the Revised Act have adopted a net asset test, which allows a corporation to pay dividends as long as the corporation's total assets exceed its total liabilities plus the preferential rights amount (if any) after the distribution.

The MBCA as Amended in 1980 and the Revised Act