dividend question dividend question
Posts 1 to 4 of 4
  1. #1

    Mark Snowdon

    Guest

    Default dividend question

    Just a quickie - Is there any rule against paying a dividend greater than the profit ? plc's do it so I assume its OK.

    the company will have minimal trade this year but is cash rich - I intend to just take a dividend to extract some of the cash, then close it with a capital distribution - S220 or something ?

    I seem to remember seeing some warning somewhere that the company can get classed as an investment vehicle and this is a bad thing ?

  2. #2

    www 1staccountancy biz

    Guest

    Default

    The main problem arises when the company declares a dividend greater than the distributable reserves...i.e the retained profits shown on the balance sheet.

  3. #3

    Mark Snowdon

    Guest

    Default thanks

    cheers Darren

    I cant see myself declaring a divi of more than I have - presumably that happens when people are trying to give everything to a minority shareholder through a divi ?

  4. #4

    www 1staccountancy biz

    Guest

    Default Re: thanks

    I've seen it happen a few times where people think that they've made a lot enough during the year when on paper they haven't, so take out more than they have really earned.

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