Dividends - alteration of capital, Business Law and Ethics


As a commercial term, the word "dividends" has a variable meaning which depends on the context in which it is used. For purposes of company law, it denotes the payments which a company makes out of its profits to the shareholders in the company.


The basic rule is that "dividends must not be paid out of capital": Verner v General & Commercial Investment Trust (per Lindley, J). For purposes of this rule "Capital" means the money subscribed pursuant to the memorandum of association, or what represents that money: Verner v General & Commercial Investment Trust.

Posted Date: 1/12/2013 4:32:09 AM | Location : United States

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