reparto de dividendos

10 keys about the dividend distribution you must not ignore.

There are 10 keys to dividend distribution that you should not ignore

1) Within three months of the end of the financial year the administrative body must formulate:

  • the annual accounts;
  • the management report; and
  • the proposal for the application of the result: Does the distribution of dividends proceed?

This formulation must be approved by the General Meeting before the end of the sixth month from the financial year-end.

Therefore, the General Meeting will decide whether to distribute dividends in accordance with the approved balance sheet.

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2) The way of applying the result can only consist in the distribution of dividends if:

  • The distribution of dividends is made from the profit of the year or from freely available reserves.
  • The services provided for in the Law and the Articles of Association have been covered.

In accordance with the Law, 10% of the profit must be applied to the legal reserve until it reaches 20% of the share capital.

The Articles of Association may stipulate that voluntary reserves must be covered.

  • The value of the net worth is not, or does not become (after distribution), less than the share capital.
  • There are no losses from previous years that would make the Net Worth less than the share capital. In this case, the profits will be used to offset these losses.
  • The amount of available reserves is at least equal to the amount of R&D expenses shown on the assets side of the balance sheet.

3) In S.L.’s (Limited Liability Companies), dividends are distributed in proportion to the share capital.

In S.A.’s (Stock Corporations) the distribution of dividends is made in proportion to the capital paid up.

4) In the dividend distribution agreement, the General Meeting will determine the time and method of payment.

Otherwise, it shall be understood that the dividend shall be payable in:

  • The registered office;
  • From the day following that on which the distribution agreement was adopted.

5) The maximum period for payment of the dividend distribution shall be 12 months from the adoption of the resolution.

6) The shareholders may receive amounts on account of the distribution of dividends. The distribution of these dividends requires:

  • Resolution of the General Meeting.
  • Preparation by the administrative body of an accounting statement. It must be clear from the statement that the company has sufficient liquidity for the distribution.
  • The amount to be distributed may not be greater than the results obtained since the end of the last financial year. This amount must be deducted:
    • Losses from previous years;
    • The amounts to be allocated to legal and statutory reserves.
    • The amount of taxes to be paid on such results.

7) If the distribution of dividends (or amounts on account) is made in contravention of the Law, it must be refunded.

The amount to be refunded will be increased by the legal interest if it can be proved that the partners were aware of the error.

8) If five years have passed since the creation of the company without any dividends being distributed, the shareholder may withdraw from the company (unless the articles of association state otherwise).

9 )In order for the partner to be able to separate from the company:

  • He must register his protest against the insufficiency of the dividends recognised.
  • The meeting will not agree to distribute dividends of at least 25% of the distributable profits of the previous year.
  • This is provided that the company has made a profit in the previous three years.

10) The shareholder may not separate if the total of the dividends distributed during the last 5 years is equivalent to 25% of the legally distributable profits recorded in that period.

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