Dividend In the CA 2016, the dividend rule is found in s131. It has two principles – ie (1) the dividend is to be paid out of the company’s profits; and (2) the dividend should not be paid if the payment will cause the company to be insolvent. As the directors are the ones who authorise the payment of dividends, they must be satisfied that the company will be solvent after the distribution is made.
Section 133(2) provides for the liability of the director and manager who wilfully paid or permitted to be paid dividends out of what they knew to be not profit. They are liable to the company to the extent of the amount exceeding the value of any distribution of dividends that could properly have been made.
The CA 2016 also prescribes the new liability imposed on the member. Section 133(1) states that the company may recover the amount of distribution received by a shareholder which exceeds the amount which could properly have been made unless the shareholder (1) has received the distribution in good faith; and (2) has no knowledge that the company did not satisfy the solvency test.
Who is to blame if you lose money in Jaks? Already made known Directors are good at self-enrichment scheme years ago and still want to try your luck? Better go Genting to bet on Big-Small, at least you still have 50% chance.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
SarifahSelinder
3,771 posts
Posted by SarifahSelinder > 2023-03-07 22:21 | Report Abuse
Klau kena bikin PP so that can pay dividend Forget the dividend
Don't pressure Andy to pay dividend just yet
Do PP so that can pay dividend just doesn't make sense