New Stock Corporation Law 2023: Interim dividend
The new Stock Corporation Law introduced the possibility for corporations to pay interim dividends. These are distributed from profits of the current fiscal year and not, as previously, from the profits of a fiscal year that has already ended.
Requirements
In order for interim dividends to be distributed, interim financial statements must be prepared as a first step. These consist of a balance sheet, an income statement and notes to the financial statements. Among other things, the notes must contain information on the reason for the interim financial statements.
In a second step, the auditors review the interim financial statements. This does not apply to companies that have waived the limited audit (opting out) or companies in which all shareholders have unanimously voted in favor of paying a dividend and there are no claims from creditors that could be harmed as a result.
Finally, the third step in the interim dividend process consists of the vote at the annual general meeting on the approval of the interim financial statements and the determination of dividends.
Conclusion
Paying interim dividends is a good way to be able to use profit from the current fiscal year. However, care must be taken to ensure that all regulations are correctly observed so that the rights of shareholders and creditors are safeguarded.
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