§ 2-304
84 words·~1 min read·
/md/corporations-and-associations/2-304·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
§2–304.
(a)By resolution of its board of directors, a corporation may apply any part of its capital surplus for:
(1)The reduction or elimination of a corporate deficit arising from a loss, however incurred, or from diminution in the value of its assets, but only after earned surplus is exhausted; or
(2)Any other proper corporate purpose.
(b)An application of capital surplus under subsection
(a)of this section shall be disclosed to the stockholders of the corporation in its next annual report.