Canada Business Corporations Act (R.S.C., 1985, c. C-44)

Marginal note:Dividends

42 A corporation shall not declare or pay a dividend if there are reasonable grounds for believing that

• (a) the corporation is, or would after the payment be, unable to pay its liabilities as they become due; or

• (b) the realizable value of the corporation’s assets would thereby be less than the aggregate of its liabilities and stated capital of all classes.