Once properly declared, the effect of a distribution is:
A) it imposes personal liability on the directors who vote for it.
B) it is revocable until actually paid.
C) it imposes personal liability on the shareholders of a solvent corporation.
D) that it is considered a debt the corporation owes to the shareholders.

Question

Quizplus · Accepted Answer

Once a distribution is properly declared, it becomes a debt the corporation owes to its shareholders. This means the corporation is obligated to pay the declared amount to the shareholders, similar to how it would owe any other form of debt.

Once Properly Declared, the Effect of a Distribution Is