Dividends – procedure for declaring and paying dividends

June 2014
A dividend is a distribution of a company’s post-tax profits made to its shareholders. If a company has made a profit, it is free to distribute these funds to its shareholders. With this in mind, we have created a brand new sub folder of documents related to dividends including Guidance Notes - Dividends, Board Minutes, a Dividend Tax Voucher and a Deed of Waiver to assist company directors and company secretaries to administer the process of recommending, declaring and processing dividend payments to shareholders.

Before a company can legally pay a dividend it must have sufficient distributable profits. In broad terms this profit is the money a company has left over after paying all its business expenses and liabilities, including all taxes due. Dividends can either be final or interim and once a company has decided to make a dividend payment to its shareholders there are certain legal requirements that it must abide by.

Our new sub folder of documents includes an easy to follow, user friendly guidance note to guide you through what dividends are, the procedure for declaring and paying a dividend, the board meeting required to recommend and declare a dividend, what a dividend voucher is as well as how a shareholder can waive a right to a dividend. Our brand new package includes:

• Guidance Notes;
• Board Minutes;
• Dividend Tax Voucher; and
• Deed of Dividend Waiver.

This new sub-folder has been written with company secretaries or company directors in mind as well as other professionals such as accountants advising the boards of SME businesses.

The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.

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