8e Distributions Flashcards

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1
Q

When can a company make a distribution?

A

When it has the profits available

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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.
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3
Q

What are distributable profits?

A
  • Accumulated realised profits.
  • Accumulated realised losses.
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4
Q

What are undistributable reserves?

A
  • Share premium account
  • Capital redemption reserve
  • Unrealised profits
  • Any reserve that the company is forbidden to distribute
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5
Q

What should the basis of the calc of a distribution be based on?

A

The latest audited accounts.

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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.

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