Quick dividend payment question...
Discussion
Dividend are paid to the individual based on their shareholdings - and are usually quoted on the dividend voucher as being at "£x,xxx.xx per share". Therefore, the initial assumption is that once the directors have decided how much of the company's profits are going to be distributed to the shareholders, then each shareholder should get the amount due to them based on their shareholding "stake" in the company.
After all, a dividend is legally a return on an investment, it is emphatically NOT a remuneration for services rendered or for work done in the company - despite what the directors might think or what the Revenue might even argue.
There is a way around this however. What actually has to happen is that one or more of the shareholders needs to sign a declaration waiving their full dividend entitlement. This should allow you to equalise the distribution.
With everything dividend related, it is strongly advised that:
i) a minute of the directors' dividend decision is kept on file
ii) a minute of the shareholders agreement to the dividends
iii) the signed waivers are kept on file
iv) dividend vouchers are produced and passed to each shareholder
After all, a dividend is legally a return on an investment, it is emphatically NOT a remuneration for services rendered or for work done in the company - despite what the directors might think or what the Revenue might even argue.
There is a way around this however. What actually has to happen is that one or more of the shareholders needs to sign a declaration waiving their full dividend entitlement. This should allow you to equalise the distribution.
With everything dividend related, it is strongly advised that:
i) a minute of the directors' dividend decision is kept on file
ii) a minute of the shareholders agreement to the dividends
iii) the signed waivers are kept on file
iv) dividend vouchers are produced and passed to each shareholder
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