No dividends shall be declared, credited or paid so long as there is any impairment of capital stock. No stock corporation having outstanding preferred stock shall, except as otherwise authorized by the commissioner, declare dividends upon common stock for any period other than a period for which dividends are declared upon preferred stock.\nThe approval of the commissioner shall be required if the total of all dividends declared by a stock corporation in any calendar year shall exceed the total of its net profits for that year combined with its retained net profits of the preceding 2 years, less any required transfer to surplus or a fund for the retirement of any preferred stock.\nFor the purposes of this section, the words ''net profits'' shall mean the remainder of all earnings from current operations plus actual recoveries on loans and investments and other assets after deducting from the total thereof all current operating expenses, actual losses, accrued dividends on preferred stock, if any, and all actual recoveries on loans and investments and other assets after deducting from the total thereof all current operating expenses, actual losses, accrued dividends on preferred stock, if any, and all federal and state taxes.
Massachusetts Legal Code