Dividends
The following check-list sets out points to consider whenever you want to issue dividends. 1. The dividend must be legal Companies Act 2006 (CA 2006 (s830) states that 'a company may only make a distribution out of profits available for the purpose' – it is vital that director/shareholders appreciate what this means. Namely that even if the bank account is in credit the company needs to have sufficient retained profits to cover the dividend at the date of payment. ‘Profits’