Simply having enough money in the bank doesn’t mean you can pay yourself a dividend. As it’s actually a distribution of profits, if you don’t have any there’s nothing to distribute. For example, if you started a company with an injection of cash, say, from your savings, you would have money in the bank. But on day one of trading you won’t have made any profit so you can’t pay a dividend.
When can a new company pay dividends?
Monday 18 February 2013
![When can a new company pay dividends?](/assets/images/title-news.png)
As a general rule, dividends are the most tax efficient way to get income out of your company. But these can only be paid where you’re making a profit. So what will the Taxman say if you pay dividends from a loss-making company?
Simply having enough money in the bank doesn’t mean you can pay yourself a dividend. As it’s actually a distribution of profits, if you don’t have any there’s nothing to distribute. For example, if you started a company with an injection of cash, say, from your savings, you would have money in the bank. But on day one of trading you won’t have made any profit so you can’t pay a dividend.
Simply having enough money in the bank doesn’t mean you can pay yourself a dividend. As it’s actually a distribution of profits, if you don’t have any there’s nothing to distribute. For example, if you started a company with an injection of cash, say, from your savings, you would have money in the bank. But on day one of trading you won’t have made any profit so you can’t pay a dividend.
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