Over paid dividends

[BrilloPad]

I did it once. Technically its a big no no but if there is no intent your accountant should be able to smooth everything over.

[ASB]

Agree with THEPUMA.

Your situation isn't that rare, and if you're confident of continuing to trade, and trade being more profitable in future, simply leave the old divi as is (even though it makes the company temporarily insolvent), and carry on...but do be more prudent when declaring dividends in future.

The main time you may come a cropper is if you tried to shut the company down whilst insolvent due to dividends in excess of retained profits. Here you may find creditors being not best pleased as it would be them that lost out. They may try to challenge the dividend, suggesting negligence on your part.

More of a legal issue than an accounting one, happy to be corrected by any legal experts.

Wouldn't there be an argument that this could be trading whilst insolvent (of itself not necessarily a problem of course) ?

Perhaps it would be prudent to have a board meeting to minute the directors support and their confidence in their ability to trade through it successfully ?

Just a thought of course.