2011 Louisiana Laws
Revised Statutes
TITLE 12 — Corporations and associations
RS 12:61 — Allocation to capital and surplus, and increases and reductions thereof

PART VI. CAPITAL, SURPLUS, DIVIDENDS

§61. Allocation to capital and surplus, and increases and reductions thereof

A. Upon initial issuance of par-value shares, the par value thereof, plus any part of any consideration received therefor in excess of the par value as the board of directors or the shareholders may fix, shall be allocated to stated capital, and the remainder of any consideration shall be allocated to capital surplus. Upon initial issuance of shares without par value, the board of directors shall state an amount to be allocated to stated capital, and the remainder of any consideration therefor shall be allocated to capital surplus. If such shares without par value have a preferential right to participate in the corporation's assets in event of liquidation, only the excess of the consideration over the aggregate amount payable to the holders thereof upon liquidation may be allocated to capital surplus.

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, reclassifications 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.

Acts 1968, No. 105, §1. Added by Acts 1970, No. 50, §3, emerg. eff. June 18, 1970, at 5:05 P.M; Acts 1997, No. 914, §1.