The Revised Act permits a corporation to purchase, redeem, or otherwise acquire its own shares unless:
A) the corporation's total assets after the distribution would be less than the sum of its total liabilities and the maximum amount that then would be payable for all outstanding shares having preferential rights in liquidation.
B) the corporation would be unable to pay its debts as they became due in the usual course of its business.
C) Both of these are correct.
D) None of these are correct.

Question

Quizplus · Accepted Answer

Both A and B are correct because they describe conditions under which a corporation is restricted from purchasing its own shares according to typical provisions in corporate law. These conditions are designed to ensure that the corporation remains solvent and able to meet its obligations.

The Revised Act Permits a Corporation to Purchase, Redeem, or Otherwise