Corporate Dividend and Distribution Requirements in Alaska

At a glance

Requirements one by one

Governing law, entity, distribution, and scope

Alaska Stat. § 10.06.990(13), (17) applies this page to an ordinary domestic for-profit corporation and defines a shareholder distribution as a corporation or subsidiary's cash or property transfer without consideration, as a dividend or otherwise, or a cash or property purchase or redemption. A share dividend is excluded from that definition and uses separate rules. Sections 10.06.358 through 10.06.383 provide the financial limits and exclude winding-up and dissolution proceedings.

Board, committee, shareholder, and charter authority

Alaska Stat. § 10.06.450(a) places corporate powers and management under board authority subject to the chapter's delegation and article provisions. A committee cannot declare dividends or distributions under § 10.06.468, though it may approve a reacquisition under a general board formula or method.

The articles may require shareholder approval even when the chapter otherwise does not under § 10.06.210(1)(J). Alaska Stat. § 10.06.375 also preserves additional dividend, purchase, and redemption restrictions in the articles, bylaws, indentures, or other corporation agreements.

Cash, property, shares, debt, repurchase, and redemption forms

The § 10.06.990(17) definition reaches cash or property dividends and other without-consideration transfers, plus cash or property purchases and redemptions. It also fixes timing when a negotiable debt security is issued in exchange for shares and when cash or property is delivered or segregated for a preferred-share sinking fund. It does not state a general dividend-in-debt form. Share dividends use §§ 10.06.355 and 10.06.373 instead.

Surplus, net-profit, equity, and capital-source test

Alaska Stat. § 10.06.358(a) offers two alternatives. Retained earnings immediately before the distribution may equal or exceed its amount. Otherwise, after giving the distribution effect, filtered assets must be at least 1.25 times filtered liabilities and the applicable current-assets test must also be met. Alaska Stat. § 10.06.990(38) defines retained earnings as undistributed and uncapitalized net profits, income, gains, and losses from incorporation; the statute states no separate surplus route.

For the second alternative, assets exclude goodwill, capitalized research and development expense, specified director- or officer-related debts, debts secured by the corporation's own shares, and deferred charges. Liabilities exclude deferred taxes, deferred income, and other deferred credits. Current assets ordinarily must at least equal current liabilities; if average pre-tax, pre-interest earnings for the two preceding fiscal years were below average interest expense, current assets must instead be at least 1.25 times current liabilities. The current-ratio rule applies only when the corporation classifies assets as current and fixed.

A junior-class dividend has an additional retained-earnings rule. Alaska Stat. § 10.06.365 requires retained earnings immediately before payment to cover the proposed distribution plus cumulative dividend arrears on shares with a senior dividend preference.

Liquidity, balance-sheet, liability, and preference test

Alaska Stat. § 10.06.360 separately bars a distribution if the corporation or the subsidiary making it is, or as a result likely would become, unable to meet its liabilities as they mature. This rule applies alongside § 10.06.358's retained- earnings or filtered financial alternative.

Alaska Stat. § 10.06.363 adds a junior-class liquidation-preference test. After the distribution, filtered assets above filtered liabilities cannot be below the liquidation preference of every class or series senior to the recipient. The definition in § 10.06.990(24)-(25) includes accrued and unpaid cumulative dividends within a liquidation preference and defines net assets as total assets above total debts.

Financial statements, valuation, reserves, and reliance

Alaska Stat. § 10.06.358 uses the property's carrying value on financial statements for a property distribution. It permits statements under generally accepted accounting principles or accounting practices and principles that are fair and reasonable in the circumstances. GAAP statements and determinations are fair and reasonable by statute; the corporation must prove that quality for another basis. Section 10.06.970(5) also makes subsidiary statements and items consolidated and states general fair-and-reasonable presentation rules.

Exchange profits cannot enter assets unless the received assets are currently realizable in cash. Current assets may include qualifying customer amounts the board in good faith reasonably expects within the 12-month current-liability period, after accounting for the specified future performance costs. These sections state no general fair-valuation alternative or distribution-reserve route.

Under § 10.06.450(b)-(c), a director may rely on qualifying information, reports, opinions, statements, or financial data from reasonably trusted and competent officers or employees, professionals within reasonably believed expertise, or a properly designated committee reasonably believed worthy of confidence. Knowledge making reliance unwarranted defeats that route.

Record date, measurement date, payment delay, and revocation

For dividend recipients, Alaska Stat. § 10.06.408(a) permits closing the transfer books for up to 70 days. Under § 10.06.408(b), a bylaw or, absent one, the board may instead set a record date no more than 60 days before the action. If neither occurs, the board's dividend-declaration resolution date is the record date.

Section 10.06.990(17) measures a dividend at declaration and a purchase or redemption when cash or property is transferred. A negotiable debt security issued for shares is measured when the corporation acquires the shares. A sinking-fund transfer occurs on delivery to the preferred-holder trustee or physical segregation in trust. Alaska states no general 120-day delayed-payment rule or distribution-revocation provision.

Class, series, equal treatment, stock distribution, and fractions

Alaska Stat. § 10.06.305 requires the same rights, preferences, privileges, and restrictions within a class or, when divided, within a series. Under Alaska Stat. § 10.06.308, the articles may authorize preferred or special shares with cumulative, noncumulative, or partly cumulative dividends and dividend or liquidation preferences.

Alaska Stat. § 10.06.373 bars paying one class as a share dividend to another unless the articles authorize it or a majority of the outstanding class being issued approves by vote or written consent. Under § 10.06.355, a fractional share has voting, dividend, and liquidation rights. Registered or bearer scrip has none unless its terms provide otherwise and may carry a deadline, sale-and-proceeds, or another board-set condition.

Distribution debt, priority, liquidation, insolvency, and boundaries

Alaska states no general secured, unsecured-parity, conditional-debt, or payment-retest rule for distribution debt. Section 10.06.990(17) instead specifies the transaction time when a negotiable debt security is exchanged for shares.

Alaska Stat. § 10.06.368 exempts a narrow deceased-shareholder purchase or redemption from §§ 10.06.358, .360, .363, and .365 when it uses life-insurance proceeds above total premiums to carry out a corporation-holder death agreement. Section 10.06.383 separately removes the corporate-finance provisions from winding-up and dissolution proceedings. This survey does not decide creditor, fiduciary, tax, accounting, valuation, regulated-company, or transaction questions.

What trips people up

The second financial route has two layers. The filtered 1.25-to-1 asset test is not enough by itself. A corporation that classifies current and fixed assets must also apply § 10.06.358(a)(2)(B)'s current-assets test.

Junior distributions carry overlays beyond the main alternative. Sections 10.06.363 and .365 protect senior liquidation and dividend preferences even when a transaction fits one § 10.06.358 route.

Property uses its compliant financial-statement carrying value. Section 10.06.358(c) does not authorize substituting an unstated fair-value method for the property's carrying value.

Common questions

Does Alaska use a surplus test?

No separate surplus route appears. Section 10.06.358 uses retained earnings or its filtered 1.25-to-1 asset/liability alternative, and §§ 10.06.360, .363, and .365 add separate limits.

May a board committee declare the dividend?

No. Section 10.06.468 expressly places declaring dividends or distributions outside committee authority, even when the articles, bylaws, and board resolution otherwise empower the committee.

May the corporation set a record date more than 60 days before payment?

The fixed record-date route is capped at 60 days before the action. Section 10.06.408 separately permits closing the stock transfer books for up to 70 days.

Are share dividends subject to the same class mechanics as cash dividends?

No. Section 10.06.373 adds an articles-or-issued-class-approval gate when shares of one class are paid to holders of another, and § 10.06.355 separately handles fractions and scrip.

Statutes and sources

• Alaska Stat. §§ 10.06.210(1)(J), .305, .308, .355, .373, .375 — governing- record authority, class and series rights, share dividends, fractions, and added restrictions. Alaska Legislature (accessed September 4, 2026).
• Alaska Stat. §§ 10.06.358-.368 — retained-earnings and filtered financial alternatives, accounting rules, maturity-liquidity and preference overlays, and the insured deceased-holder exception. Alaska Legislature (accessed September 4, 2026).
• Alaska Stat. §§ 10.06.383, .408, .450, .468 — dissolution exclusion, record date, board authority and reliance, and committee limits. Alaska Legislature (accessed September 4, 2026).
• Alaska Stat. §§ 10.06.970(5), .990(13), (17), (24)-(25), (38) — accounting construction and key entity, distribution, preference, net-assets, and retained-earnings definitions. Alaska Legislature (accessed September 4, 2026).