Dividend Payment Agreement

The answer to the question of whether or not you should include a dividend policy therefore depends very largely on the company`s strategy and the objectives of each shareholder. It`s usually a good idea to consider one and check it out when business grows. Dividends are followed in chronological order of events and the associated data is important in determining which shareholders qualify to receive the dividend. As a reminder, dividends or distributions to shareholders can only be made from profits that are available for this purpose. Interim dividends do not require full accounts. However, directors must have sufficient information to be able to adequately judge whether the amount of “distributable profits” is acceptable at the time of payment. Dividends paid by funds are different from dividends paid by companies. Corporate dividends are usually paid on the profits generated by the company`s activities. Funds operate on the principle of net asset value (IORP), which reflects the valuation of their outstanding assets or the price of assets a fund can track. Since the funds have no intrinsic profits, they pour dividends on their NAV. Taxes are another important consideration for investments in dividend profits. Investors in high tax brackets prefer stocks that dividend-back if the jurisdiction allows a dividend tax that is zero or relatively lower than that of normal rates.

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