Case law relating to dividends, Business Law and Ethics

Case Law Relating To Dividends:

The above provisions of Table A supplement the following common law rules:

1)      Losses in previous years need not be provided for. Furthermore a dividend can be paid if there is a profit on the current year's trading: Re: National Bank of Wales (1899).

2)      Profits of previous years can be brought forward and distributed even if there is a revenue loss in the current trading year: Re: Hoare & Co (1904)

3)      Losses on fixed assets in the current year need not be made good by provision for depreciation before treating a revenue profit as available for dividend: Lee v Neuchatel Asphalte Co (1889)

4)      Unrealized capital profits on a revaluation of assets can be distributed by way of a dividend, or used to pay a bonus issue of fully paid shares: Dimbula Valley (Ceylon) Tea Co v Laurie (1961).

5)      Dividends must not be paid out of capital: Verner v General & Commercial Investment Trust.

Posted Date: 1/12/2013 4:34:58 AM | Location : United States

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