When It Is Unlawful to Declare Dividends Because of a Deficiency

question 7

Multiple Choice

When it is unlawful to declare dividends because of a deficiency in the capital fund and yet the shareholders want a quick pay-out,then

• A)Revenue Canada can issue "not withstanding" tax credits.
• B)the corporation needs to earn enough profits to restore the deficiency.
• C)shareholders can lend money to the corporation and receive interest payments in return.
• D)the corporation can re-capitalize at a lower amount.
• E)wages can be paid to officers instead of dividends.

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Definitions:

Educational Program

A planned sequence of courses and experiences designed to meet learning objectives and educational goals.

North American

Pertaining to or originating from North America, a continent that includes Canada, the United States, Mexico, and Greenland among others.

Preschool Program

An educational initiative designed to prepare children under the age of kindergarten entry for academic and social success.

Common Food

Food items that are widely consumed and readily available in a particular culture or community.