Legal Question in Business Law in New York

Re: payment of dividends after a company loan has been secured

In general, dividends and other distributions may be paid by a New York corporation only to the extent of its surplus (only if the net assets of the corporation remaining after such distribution at least equal the amount of its stated capital). Also, a corporation may not pay dividends if doing so would render it insolvent. Have a corporate attorney review the capital structure and founding documents of the company in question if you have a specific concern in mind.