How to Distribute Dividends?
When Can I Distribute Dividends?
Dividends can only be distributed after we prepare and submit the annual report, and only if the annual report shows profit and dividends were declared by the business owners.
Once the annual report is submitted, dividends can be distributed up to the maximum specified.
Who Receives Dividends?
They must be distributed equally to the shareholders (not the board members). So, for example, if a company has two shareholders, John, 20% of shares, and Anne, 80%, and the business distributes 5000 euros in dividends, 1000€ will go to John, and 4000€ will go to Anne.
How to Distribute Them?
The distribution must be made from the corporate bank account to an account owned directly by the shareholder (not another company or another person) by that amount. The concept must be "dividends payment."
The dividends may be distributed simultaneously or in several installments (2-3 is regularly accepted). For example, suppose the previous company can allocate 5000 euros after the annual report. In that case, it can distribute initially 1000 euros (200 will go to John and 800 to Anne), then some months later 2000 euros (400 will go to John and 1600 to Anne), and some months later another 2000 euros.
Updated on: 22/05/2023