District Of Columbia § 29-304.60 - Distributions to shareholders.
Full text of District Of Columbia D.C. Code § 29-304.60 — Distributions to shareholders., with citation guidance and answers to common questions.
§ 29-304.60. Distributions to shareholders.
29-304.60A board of directors may authorize, and the corporation may make, distributions to its shareholders subject to restriction by the articles of incorporation and the limitation in subsection (c) of this section.
If the board of directors does not fix the record date for determining shareholders entitled to a distribution, other than one involving a purchase, redemption, or other acquisition of the corporation’s shares, the record date shall be the date the board of directors authorizes the distribution.
A distribution shall not be made if, after giving it effect:
The corporation would not be able to pay its debts as they become due in the usual course of business; or
The corporation’s total assets would be less than the sum of its total liabilities plus, unless the articles of incorporation permit otherwise, the amount that would be needed, if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution.
The board of directors may base a determination that a distribution is not prohibited under subsection (c) of this section either on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances.
Except as otherwise provided in subsection (g) of this section, the effect of a distribution under subsection (c) shall be measured:
In the case of distribution by purchase, redemption, or other acquisition of the corporation’s shares, as of the earlier of the date that:
Money or other property is transferred or debt incurred by the corporation; or
The shareholder ceases to be a shareholder with respect to the acquired shares;
In the case of any other distribution of indebtedness, as of the date the indebtedness is distributed; and
In all other cases, as of the date that:
The distribution is authorized if the payment occurs within 120 days after the date of authorization; or
The payment is made if it occurs more than 120 days after the date of authorization.
A corporation’s indebtedness to a shareholder incurred by reason of a distribution made in accordance with this section shall be at parity with the corporation’s indebtedness to its general, unsecured creditors except to the extent subordinated by agreement.
Indebtedness of a corporation, including indebtedness issued as a distribution, shall not be considered a liability for the purposes of determinations under subsection (c) of this section if its terms provide that payment of principal and interest are made only if and to the extent that payment of a distribution to shareholders could be made under this section. If the indebtedness is issued as a distribution, each payment of principal or interest shall be treated as a distribution, the effect of which is measured on the date the payment is made.
This section shall not apply to distributions in liquidation under .
Annotations
Source: official District Of Columbia text · Last verified 2026-08-27
Frequently Asked Questions About District Of Columbia § 29-304.60
What does D.C. Code § 29-304.60 cover?
Section 29-304.60 ("Distributions to shareholders.") is part of the D.C. Code, the codified statutory law of District Of Columbia. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite District Of Columbia § 29-304.60?
A common citation format is "D.C. Code § 29-304.60" (District Of Columbia). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of District Of Columbia law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the District Of Columbia official source linked on this page or consult a licensed District Of Columbia attorney.
How does District Of Columbia § 29-304.60 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in District Of Columbia can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in District Of Columbia.