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How to Distribute Dividends


How to Distribute Dividends</a>

According to the law, the joint-stock companyHas the right to distribute dividends based on the results of the first quarter, six months, nine months of the financial year and (or) at the end of the entire financial year. Dividends are paid out of the net profit of the joint-stock company.

For their payment, shareholders of the company decide to pay dividends.

For different categories of shares, dividends can be paid in different order.



Payment of dividends on shares is a dutyOf the joint-stock company. Dividends are paid in certain periods (quarter, half year, nine months, fiscal year). The source of payment of dividends is the net profit of the joint-stock company - according to the financial statements.


The process of dividend distribution and paymentBegins with the adoption by the joint-stock company (general meeting of shareholders) of the relevant decision. The General Meeting of Shareholders determines the amount of dividends and forms of their payment for shares of all categories and types. Before that, the board of directors of the joint-stock company recommends to the general meeting of shareholders an approximate amount of dividends, and the general meeting has no right to pay Dividends In a larger amount than recommended.


At the general meeting of shareholders,Term and procedure for payment of dividends, unless they are determined by the charter of the joint-stock company. Dividends must be paid no later than 60 days after the decision of the general meeting on their payment. Payment of dividends on one category of shares is carried out simultaneously to all shareholders who own shares of this category.


The legislation provides for cases when joint-stock companies have no right to decide on the distribution of dividends and, accordingly, to distribute them. These cases include:
1. incomplete payment of the authorized capital-
2. the presence in the joint-stock company of signs of bankruptcy or their possible appearance after the distribution of dividends-
3. The value of the net assets of the joint-stock company is less than its authorized capital and reserve fund.


If the decision on the full payment of dividends onPreferred shares, the amount of dividends for which is established by the charter, the joint-stock company is not accepted, then the company has no right to decide on the payment of dividends on ordinary shares and on those preferred shares, the amount of dividends for which is not established. Also, the joint-stock company has no right to pay Dividends On preference shares for which the sizeDividends are established by the charter, unless a decision was made to pay dividends on those preferred shares that give their owners an advantage in the order of receiving dividends.

How to Distribute Dividends Was last modified: June 20th, 2017 By Felzauwc
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