TITLE 12. CORPORATIONS AND ASSOCIATIONS
TITLE 12. CORPORATIONS AND ASSOCIATIONS
B. The board of directors may at any time transfer any amount from earned surplus or capital surplus to stated capital in respect of any issued shares or otherwise.
C. The board may at any time transfer from stated capital to capital surplus any amount of net assets in excess of (1) the aggregate par value of the issued shares having no preferential right to participate in the corporation's assets in event of liquidation, plus (2) the greater of the aggregate par value of, or the aggregate amount payable in liquidation on, any issued shares which have a preferential right to participate in the assets in event of liquidation; provided that only the shareholders may transfer from stated capital any amount allocated by them to stated capital.
D. Upon cancellation of shares, stated capital shall be reduced by an amount equal to (1) the aggregate par value of such shares having par value, and the aggregate allocated value of such shares without par value, plus (2) to the extent of the price paid on purchase or redemption of such par-value shares in excess of the par value thereof, any excess of the allocated value over the par value thereof.
E. Stated capital, capital surplus and earned surplus shall respectively be reduced by amounts applied therefrom to dividends or purchase or redemption of shares, and by amounts transferred therefrom in connection with stock dividends, reclassification of stock or otherwise.
F. Notwithstanding the provisions of subsection A of this Section, any excess over the consideration allocated to stated capital upon issuance of shares in a merger, consolidation or acquisition of all or substantially all of the outstanding shares or of the assets of a business, nonprofit or foreign corporation, may, to the extent of the earned surpluses of the business corporations, nonprofit corporations and foreign corporations which do not survive the merger or consolidation or the shares or assets of which are acquired, be allocated to earned surplus.
B. The board of directors may create and abolish reserves out of earned surplus for any proper purposes. Earned surplus so reserved shall not be available for payment of dividends, purchase or redemption of shares, or transfer to capital surplus or stated capital. Earned surplus not otherwise reserved shall be deemed reserved, to the extent of accrued unpaid preferential dividends, for the payment of such dividends pursuant to declaration thereof or as part of the redemption or purchase price of shares of the class or series on which such dividends are payable.
C. Following a merger into, or creation by consolidation of, a corporation, such corporation's earned surplus shall not exceed the sum of the earned surpluses of the merging or consolidating business corporations, nonprofit corporations and foreign corporations, as reduced by any distributions or transfers therefrom in connection with the merger or consolidation.
D. Upon disposition of treasury shares acquired in whole or in part by application of earned surplus, the amount so applied may be restored to earned surplus to the extent of the consideration received upon such disposition.
E. In computing surplus, proper allowance shall (except as provided in subsection F of this Section) be made for depreciation and depletion sustained, and ascertained or known losses of every character. Deferred assets and prepaid expenses shall be considered as assets only to the extent of amounts thereof not used or amortized.
F. (1) Unless the articles provide otherwise, a corporation, including a corporation engaged in extractive or oil and gas activities, which owns wasting assets, including oil and gas properties, intended for sale in the ordinary or usual course of business, or which owns property having a limited life, such as a lease for a term of years, or patents, need make no allowance for depletion or amortization of the cost of such assets in computing surplus.
(2) Without limitation of other items which may be properly includable therein in accordance with generally accepted accounting principles or otherwise, corporations engaged in the business of extraction and sale of oil and gas may include in the calculation of depletion for such purposes their aggregate intangible drilling cost of drilling oil and gas wells, including any item of expense or cost not recoverable from a well after it becomes uneconomical other than casing, such as seismic costs, drilling costs, stimulation costs, secondary and tertiary recovery costs, completion costs, workover costs, well site preparation expenses and other similar expenses or costs, aggregate leasehold cost, and any item of expense or cost relating to the acquisition of a lease other than rentals, such as title verification and other title review expenses and lease bonuses.
B. If the corporation has no surplus available for dividends, it may pay dividends out of its net profits for the then current or the preceding fiscal year or both; except that no dividend shall be paid (1) at a time when the corporation's assets are exceeded by its liabilities, or when the net assets are less than the aggregate amount payable on liquidation upon the issued shares, if any, which have a preferential right to participate in the corporation's assets in event of liquidation, or (2) which would reduce the assets below the liabilities, or which would reduce the net assets below the aggregate amount payable on liquidation upon the issued shares, if any, which have a preferential right to participate in the corporation's assets in event of liquidation. R.S. 12:62E and F shall apply to the computation of net profits for the purpose of dividends.
C. No dividend shall be paid in shares, other than treasury shares, except upon transfer, to stated capital from surplus, of (1) an amount not less than the aggregate par value of the par-value shares so issued, and (2) such amount as the directors may determine in respect of shares without par value so issued; and no dividend payable in shares of any class shall be paid to shareholders of any other class, unless (1) the articles so permit, or (2) such payment is authorized, by vote of a majority of the voting power present, by the holders of the shares of the class in which the payment is to be made.
