Which of the Following Is Not a Legal Restriction Related

question 74

Multiple Choice

Which of the following is not a legal restriction related to profit distributions by a corporation?

• A) The amount distributed to owners must be in compliance with the state laws governing corporations.
• B) The amount distributed in any one year can never exceed the net income reported for that year.
• C) Profit distributions must be formally approved by the board of directors.
• D) Dividends must be in full agreement with the capital stock contracts as to preferences and participation.