2017 ORS 60.181¹
Distributions to shareholders

(1) A 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 (3) of this section.

(2) If the board of directors does not fix the record date for determining shareholders entitled to a distribution, other than a date involving a purchase, redemption or other acquisition of the corporation’s shares, it is the date the board of directors authorizes the distribution.

(3) A distribution may be made only if, after giving it effect, in the judgment of the board of directors:

(a) The corporation would be able to pay its debts as they become due in the usual course of business; and

(b) The corporation’s total assets would at least equal 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.

(4) The board of directors may base a determination that a distribution is not prohibited under subsection (3) 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.

(5) The effect of a distribution under subsection (3) of this section is measured:

(a) In the case of distribution by purchase, redemption or other acquisition of the corporation’s shares, as of the earlier of the date the money or other property is transferred or debt incurred by the corporation or the date the shareholder ceases to be a shareholder with respect to the acquired shares;

(b) In the case of any other distribution of indebtedness, as of the date the indebtedness is distributed; and

(c) In all other cases, as of the date a distribution is authorized if the payment occurs within 120 days after the date of authorization or the date the payment is made if it occurs more than 120 days after the date of authorization.

(6) A corporation’s indebtedness to a shareholder incurred by reason of a distribution made in accordance with this section is at parity with the corporation’s indebtedness to its general unsecured creditors, unless the shareholder agrees to subordination or the corporation grants the shareholder a security interest or other lien against corporate assets to secure the indebtedness. [1987 c.52 §48; 1989 c.1040 §13]

Notes of Decisions

Controlling shareholder is not entitled to immunity for damage where excessive distribu­tions leave corpora­tion inadequately capitalized to meet normal business debts. Klokke Corp. v. Classic Exposi­tion, Inc., 139 Or App 399, 912 P2d 929 (1996), Sup Ct review denied

Chapter 60

Notes of Decisions

In General

Owner of corporate shares that does not meet defini­tion for “shareholder” does not have statutorily created inspec­tion rights. Yeoman v. Public Safety Center, Inc., 241 Or App 255, 250 P3d 411 (2011), Sup Ct review denied

Atty. Gen. Opinions

Under Former Similar Statutes (Ors Chapter 58)

This chapter as authorizing partnership of corpora­tion and individual; validity of partnership between a private corpora­tion and an individual when corpora­tion charter so provides, (1972) Vol 36, p 94

Law Review Cita­tions

Under Former Similar Statutes (Ors Chapter 57)

18 WLR 123 (1982)

In General

24 WLR 203, 257, 275 (1988); 30 WLR 407 (1994)

1 Legislative Counsel Committee, CHAPTER 60—Private Corporations, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors060.­html (2017) (last ac­cessed Mar. 30, 2018).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2017, Chapter 60, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano060.­html (2017) (last ac­cessed Mar. 30, 2018).
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent.