Dividend Declarations

The team at Figures Please work alongside company secretaries to ensure that dividend declarations are legally compliant, financially justified, and accurately recorded, safeguarding both the company and its shareholders.

The process typically involves several coordinated steps between our team, directors at your company, and company secretaries.

Review the company’s financial statements

We review the company’s financial statements to determine if there are sufficient distributable profits, as required under Section 830 of the Companies Act 2006.

This assessment is based on the most recent annual or interim accounts, which must demonstrate that the proposed dividend will not exceed available profits and will not jeopardise the company’s ability to pay its debts as they fall due.

Board of Directors Meeting

The board of directors hold a properly minuted meeting to formally propose and declare the dividend. For final dividends, shareholder approval at a general meeting may be necessary, while interim dividends can typically be declared by directors alone.

Once the dividend is declared, our team record the transaction in the company’s books. This involves:

• Debiting the retained earnings account for the total dividend amount, reflecting the reduction in equity
• Crediting a dividends payable liability account, acknowledging the company’s obligation to pay shareholders
• On the payment date, debiting the dividends payable account and crediting the cash account to reflect the actual outflow of funds

Lastly, company secretary ensures that dividend vouchers or certificates are issued to shareholders, and that all statutory records and filings are updated as required.

Lets talk About Dividend Declarations