Can I Sue for Dividends If the Company Is Profitable but Does Not Pay Me?

Shareholder Disputes

Prepared by: Constantinople

A company's earning income does not require immediate proportional payment into a shareholder's account. First, the existence of distributable profits and the competent body's resolution are examined. Profits appearing in the balance sheet are different from an accrued dividend claim that is due for payment. The company type and contractual provisions also affect the result.

Prepare the general meeting minutes, approved financial statements, profit distribution proposal and articles of association. If there is a distribution resolution, records showing the amount, payment date and your shareholding percentage are important. If you believe other shareholders received payments under different descriptions, identify the supporting transactions separately. Remuneration, repayment of a loan and dividends do not have the same accounting or legal basis.

Where no distribution resolution exists, the issue may concern the failure to pass one or the manner in which the majority exercises its powers. The conditions and time limits for annulment are assessed separately. Recovery of an accrued dividend claim may involve litigation or enforcement and commercial mediation, depending on the nature of the claim. Merely having sent money to the company does not establish that every payment may be reclaimed as a dividend.

Prepare the financial statements, distribution resolution and payment records together. Failure to pass a distribution resolution and failure to pay an accrued dividend give rise to different claims.

File review is a paid service. The scope and fee are set out in writing before work begins.