What are the legal requirements for dividend distribution?

Legal requirements for dividend distribution vary by jurisdiction and type of company. In general, companies must follow the guidelines set forth in their articles of incorporation, bylaws, or other governing documents. Additionally, many jurisdictions have laws that require companies to have sufficient profits or retained earnings before distributing dividends to shareholders. Companies may also be required to hold shareholders' meetings and obtain approval before issuing dividends. Failure to comply with legal requirements for dividend distribution can result in legal action and penalties for the company and its directors.

This mind map was published on 14 April 2024 and has been viewed 63 times.