Why might a corporation's ability to distribute dividends be restricted? Provincial laws may require that the...

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Why might a corporation's ability to distribute dividends be restricted? Provincial laws may require that the retained earnings balance not fall below the cost of issued shares. The shareholders may set aside designated amounts for future expansion or other business purposes. The corporate charter may require that transactions with non-owners be excluded from retained earnings. An agreement with bondholders may require that the balance of retained earnings be maintained at a minimum level. Why might a corporation's ability to distribute dividends be restricted? Provincial laws may require that the retained earnings balance not fall below the cost of issued shares. The shareholders may set aside designated amounts for future expansion or other business purposes. The corporate charter may require that transactions with non-owners be excluded from retained earnings. An agreement with bondholders may require that the balance of retained earnings be maintained at a minimum level.

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The detailed answer for the above question is provided below A corporations ability to distribute dividends can be restricted for a variety of reasons ... View the full answer