Delaware Code

8 Del. C. § 173 (2026)

Declaration and payment of dividends

✓ current as of May 2026

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No corporation shall pay dividends except in accordance with this chapter. Dividends may be paid in cash, in property, or in shares of the corporation’s capital stock. If the dividend is to be paid in shares of the corporation’s theretofore unissued capital stock the board of directors shall, by resolution, direct that there be designated as capital in respect of such shares an amount which is not less than the aggregate par value of par value shares being declared as a dividend and, in the case of shares without par value being declared as a dividend, such amount as shall be determined by the board of directors. No such designation as capital shall be necessary if shares are being distributed by a corporation pursuant to a split-up or division of its stock rather than as payment of a dividend declared payable in stock of the corporation.

8 Del. C. 1953, § 173; 56 Del. Laws, c. 50; 59 Del. Laws, c. 437, § 10; 65 Del. Laws, c. 127, § 5;

Notes of Decisions

Cited in 7 cases (2 in the last 5 years), 1994–2025 · leading case: Off. Comm. of Unsecured Creditors of Nat'l Forge Co. v. Clark (In Re Nat'l Forge Co.), 344 B.R. 340 (W.D. Pa. 2006).

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Off. Comm. of Unsecured Creditors of Nat'l Forge Co. v. Clark (In Re Nat'l Forge Co.), 344 B.R. 340 (W.D. Pa. 2006). “8 Del. C. § 173. 22 .Although § 174(c) allows directors to be subrogated to the rights of the corporation against stockholders who receive the payment with knowledge of its unlawfulness, see 8 Del.”

Off. Comm. of Unsecured Creditors of Buckhead Am. Corp. v. Reliance Capital Grp., Inc. (In Re Buckhead Am. Corp.), 178 B.R. 956 (D. Del. 1994). “” 8 Del.C. § 173. 23 Plaintiff claims that the payments made by DIA in connection with the subject LBO transactions “were, in substance, unlawful dividends and/or stock purchases in violation of §§ 160 and/or 173 of the [DGCL].”

Keith A. Fotta (Del. Ch. 2016). “66 8 Del. C. § 173. 17 the issued shares are void.”

IDT Corp. v. U.S. Specialty Ins. Co. (Del. Super. Ct. 2019). “142 Under 8 Del. C. §173, [d]ividends may be paid in cash, in property, or in shares of the corporation’s capital stock.”

In re The Chemours Co. Derivative Litig. (Del. Ch. 2021). “195 8 Del. C. § 173. 196 8 Del. C. § 170(a)(1)–(2).”

Sabby Volatility Warrant Master Fund Ltd. v. Jupiter Wellness, Inc. (2d Cir. 2025). “8 Del. C. § 173. The declaration of a cash or property dividend creates a binding contract between the corporation and shareholders as of the dividend’s record date.”

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