A shareholder may be required to repay a dividend paid by the corporation.

Name: A shareholder may be required to repay a dividend paid by the corporation.
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Question

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If the dividend was paid in error, or if the corporation subsequently suffers a loss or reduction in earnings that would have affected its decision to pay the dividend, a court may order a shareholder to repay the dividend. This is commonly known as a "dividend clawback."

A Shareholder May Be Required to Repay a Dividend Paid