8e Distributions Flashcards
1
Q
When can a company make a distribution?
A
When it has the profits available
2
Q
How should a dividend be paid?
A
- Directors recommend dividend.
- General meeting declares it by passing an ordinary resolution.
- Amount paid cannot exceed the amount recommended by Directors.
3
Q
What are distributable profits?
A
- Accumulated realised profits.
- Accumulated realised losses.
4
Q
What are undistributable reserves?
A
- Share premium account
- Capital redemption reserve
- Unrealised profits
- Any reserve that the company is forbidden to distribute
5
Q
What should the basis of the calc of a distribution be based on?
A
The latest audited accounts.
6
Q
What are the consequences of an unlawful dividend?
A
This can be recovered by member, Director who knew it was unlawful or an auditor due to their erroneous accounts.
