Regulatory Alerts2003-08-19
Subchapter S Corporations Distributions (Dividends)
The Louisiana Office of Financial Institutions clarifies that earnings distributions for state-chartered financial institutions converting to Subchapter S status are legally equivalent to dividends and must comply with statutory limits under LSA R.S. 6:263(B). These distributions require prior Board of Directors declaration before payment and mandate Commissioner approval to exceed the established limits. Consequently, converting institutions must align their dividend practices with existing regulatory caps rather than treating earnings distributions as automatic or exempt.
Share