Articles on: Annual Reports

I Have Profits, How Do Dividends Get Distributed?

When distributing dividends for your Estonian business, it is essential to understand the process.

First, you must fill in the "Profit distribution resolution" section when reviewing your annual report. This section includes the amount you plan to distribute in dividends and the calculation of your retained earnings after distribution.



For example, if you plan to distribute €30,000 in dividends and have a profit of €51,502, the retained earnings will be €21,502 (€51,502 – €30,000).

For multi-member companies, the distribution of dividends must be proportional to the number of shares owned by each member. This means that if you own 80% of the shares and your business partner Sarah owns 20% of the shares, and you decide to distribute €12,000, €9,600 will go to you, and €2,400 will go to Sarah.

It is important to note that the final amount you distribute cannot exceed the amount specified in the "Profit distribution resolution" section.

Additionally, you have the flexibility to distribute dividends in stages. For example, suppose you can distribute up to €50,000 and decide to distribute only €20,000 now. In that case, you can still distribute up to €30,000 later. This allows for greater control and flexibility in managing your business finances.

If you have any questions about distributing dividends for your company, do not hesitate to contact our Customer Support team through the chat.

Updated on: 24/01/2023

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