RE: What needs to happen to decide there will be no company dividend this year.

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ASB replied

1 February 2012, 15:58
Originally posted by rtgibson View Post

Still being in a situation of divorce (as talked about in past posts) - the company hasn't really turned over enough money to make a dividend worthwhile. My year end doesn't happen until July either so thats quite a way off.

I am company director with shares split 50/50 with my soon to be ex-wife. Ex wife was company secretary but has since been terminated leaving her as a shareholder only. My question is that I can decide not to pay a dividend this year can't I ? (therefore if I dont pay myself I dont have to pay her either)

As a shareholder she can't simply demand that a dividend is created and paid out can she ?

Aren't I in a position where if the company (me) decides its not viable to have a dividend this year I can just make that decision can't I ???

Regards
Russ

It is the BoD that decides dividends by board meeting. In that respect it's not a problem. However she does have rights as a shareholder and could petition a court that you are being prejudicial.

Section 994 Companies act 2006 - Shareholder disputes - Shareholder Rights

If it is the case that you are not paying a dividend because of the trading position then fine. However if you have traditionally done so and your reason for not paying is because of your unfortunate marital situation then she might just have a point; though any action would be somewhat expensive on her part.

In any event what assets the company may or may not have are going to be part of the "pot" when it comes to settlement, irrespective of who may own them on paper. It is marital property.
Leave a comment:
northernladuk replied

1 February 2012, 15:56
Not trying to be unhelpful but shouldn't you have an accountant to help you through this minefield to maximise your situation? It can be complicated at best without an ex wife shareholder and I don't want to be rude but your understanding of your business set up is lacking a bit.

Her position as secretary has no bearing on your situation, it is her position as 50/50 shareholder. I presume she has full voting rights with her share allocation? Is this what you agreed? Normal shares not type B or anything?

As a 50% shareholder you are not the company, she is half of it. You are a director of a company owned by the two of you.

EDIT : Do we assume from your title you have also mailed this to someone else? Your accountant?

Last edited by northernladuk; 1 February 2012, 16:00.
Leave a comment:
kingcook replied

1 February 2012, 15:52
Originally posted by rtgibson View Post

Still being in a situation of divorce (as talked about in past posts) - the company hasn't really turned over enough money to make a dividend worthwhile. My year end doesn't happen until July either so thats quite a way off.

I am company director with shares split 50/50 with my soon to be ex-wife. Ex wife was company secretary but has since been terminated leaving her as a shareholder only. My question is that I can decide not to pay a dividend this year can't I ? (therefore if I dont pay myself I dont have to pay her either)

As a shareholder she can't simply demand that a dividend is created and paid out can she ?

Aren't I in a position where if the company (me) decides its not viable to have a dividend this year I can just make that decision can't I ???

Regards
Russ

You are 50/50 shareholder with your wife. You own 50% of the business. So does she.

Guess who gets to decide on things?
Leave a comment:
rtgibson started a topic RE: What needs to happen to decide there will be no company dividend this year.

1 February 2012, 15:30
RE: What needs to happen to decide there will be no company dividend this year.

Still being in a situation of divorce (as talked about in past posts) - the company hasn't really turned over enough money to make a dividend worthwhile. My year end doesn't happen until July either so thats quite a way off.

I am company director with shares split 50/50 with my soon to be ex-wife. Ex wife was company secretary but has since been terminated leaving her as a shareholder only. My question is that I can decide not to pay a dividend this year can't I ? (therefore if I dont pay myself I dont have to pay her either)

As a shareholder she can't simply demand that a dividend is created and paid out can she ?

Aren't I in a position where if the company (me) decides its not viable to have a dividend this year I can just make that decision can't I ???

Regards
Russ
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