N.Y. BSC Law § 510

§ 510. Dividends or other distributions in cash or property.\n (a) A corporation may declare and pay dividends or make other\ndistributions in cash or its bonds or its property, including the shares\nor bonds of other corporations, on its outstanding shares, except when\ncurrently the corporation is insolvent or would thereby be made\ninsolvent, or when the declaration, payment or distribution would be\ncontrary to any restrictions contained in the certificate of\nincorporation.\n (b) Dividends may be declared or paid and other distributions may be\nmade either (1) out of surplus, so that the net assets of the\ncorporation remaining after such declaration, payment or distribution\nshall at least equal the amount of its stated capital, or (2) in case\nthere shall be no such surplus, out of its net profits for the fiscal\nyear in which the dividend is declared and/or the preceding fiscal year.\nIf the capital of the corporation shall have been diminished by\ndepreciation in the value of its property or by losses or otherwise to\nan amount less than the aggregate amount of the stated capital\nrepresented by the issued and outstanding shares of all classes having a\npreference upon the distribution of assets, the directors of such\ncorporation shall not declare and pay out of such net profits any\ndividends upon any shares until the deficiency in the amount of stated\ncapital represented by the issued and outstanding shares of all classes\nhaving a preference upon the distribution of assets shall have been\nrepaired. A corporation engaged in the exploitation of natural resources\nor other wasting assets, including patents, or formed primarily for the\nliquidation of specific assets, may declare and pay dividends or make\nother distributions in excess of its surplus, computed after taking due\naccount of depletion and amortization, to the extent that the cost of\nthe wasting or specific assets has been recovered by depletion reserves,\namortization or sale, if the net assets remaining after such dividends\nor distributions are sufficient to cover the liquidation preferences of\nshares having such preferences in involuntary liquidation.\n