My understanding is that dividends may only be paid from retained profits, and any dividend paid must not occur at the expense of the company's CT liability, thus rendering the dividend ultra vires (illegal). The implication here is that, if a company begins trading in May, stops briefly, its cash balance must not then fall below whatever CT it owed at the time the most recent Dividend was paid. However I read that salary can continue to be paid even if this depletes the funds available to pay CT - I have to ask if the same is true of expenses.
What exactly does the law say about funds availble to pay CT?
Thanks,
TM
What exactly does the law say about funds availble to pay CT?
Thanks,
TM
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