2023 New York Laws › BSC - Business Corporation › Article 5 - Corporate Finance › 511 - Share Distributions and Changes.

§ 511. Share distributions and changes.
(a)  A  corporation  may make pro rata distributions of its authorized
but unissued shares to holders of any class or series of its outstanding
shares, subject to the following conditions:
(1) If a distribution of shares having  a  par  value  is  made,  such
shares  shall be issued at not less than the par value thereof and there
shall be transferred to stated capital at the time of such  distribution
an amount of surplus equal to the aggregate par value of such shares.
(2)  If a distribution of shares without par value is made, the amount
of stated capital to be represented by each such share shall be fixed by
the board, unless the  certificate  of  incorporation  reserves  to  the
shareholders  the  right  to fix the consideration for the issue of such
shares, and there shall be transferred to stated capital at the time  of
such  distribution  an  amount  of surplus equal to the aggregate stated
capital represented by such shares.
(3) A distribution of shares of any class or series  may  be  made  to
holders  of  the  same or any other class or series of shares unless the
certificate of incorporation provides otherwise, provided, however, that
in the case of a corporation incorporated prior to the effective date of
subparagraph (4) of this paragraph, then so long as any shares  of  such
class remain outstanding a distribution of shares of any class or series
of  shares  of  such corporation may be made only to holders of the same
class or series  of  shares  unless  the  certificate  of  incorporation
permits  distribution  to  holders of another class or series, or unless
such distribution is approved by the affirmative  vote  or  the  written
consent  of  the  holders of a majority of the outstanding shares of the
class or series to be distributed.
(4) A distribution of any class or series of shares shall  be  subject
to  the preemptive rights, if any, applicable to such shares pursuant to
this chapter.
(b) A corporation making a pro rata  distribution  of  authorized  but
unissued  shares  to  the  holders of any class or series of outstanding
shares may at its option make an equivalent distribution  upon  treasury
shares  of the same class or series, and any shares so distributed shall
be treasury shares.
(c) A change of issued shares of any class which increases the  stated
capital  represented  by  those shares may be made if the surplus of the
corporation is sufficient to permit the  transfer,  and  a  transfer  is
concurrently made, from surplus to stated capital, of an amount equal to
such increase.
(d)  No  transfer  from  surplus  to  stated capital need be made by a
corporation making a distribution of its treasury shares to  holders  of
any  class  of  outstanding  shares;  nor upon a split up or division of
issued shares of any class into a greater number of shares of  the  same
class,  or  a  combination  of  issued shares of any class into a lesser
number of shares of the same class, if  there  is  no  increase  in  the
aggregate stated capital represented by them.
(e)  Nothing  in  this section shall prevent a corporation from making
other transfers from surplus to stated capital in connection with  share
distributions or otherwise.
(f)  Every distribution to shareholders of certificates representing a
share distribution or a change of shares which affects stated capital or
surplus shall be accompanied by a  written  notice  (1)  disclosing  the
amounts  by which such distribution or change affects stated capital and
surplus, or (2) if such amounts are not determinable at the time of such
notice, disclosing the approximate effect of such distribution or change
upon stated capital and surplus and stating that such  amounts  are  not
yet determinable.
(g)  When issued shares are changed in any manner which affects stated
capital or surplus, and no distribution to shareholders of  certificates
representing  any  shares resulting from such change is made, disclosure
of the effect of such change upon the stated capital and  surplus  shall
be  made  in  the  next financial statement covering the period in which
such change is made that is furnished by the corporation to  holders  of
shares  of  the  class  or  series so changed or, if practicable, in the
first notice of  dividend  or  share  distribution  or  change  that  is
furnished  to such shareholders between the date of the change of shares
and the next such financial statement,  and  in  any  event  within  six
months of the date of such change.