The interim dividend mechanism allows limited liability companies with regular profits to pay them to owners more than once a year. Interim dividend requirements are defined in Articles 194 and 195 of the Commercial Companies and Partnerships Code. However, not all issues relating to such payments are resolved in the code so that it is advisable to address them in the articles of association. When interim dividend is declared, dividend as such is merely an expectation, a future and uncertain event. If the final dividend is not paid or is declared at an amount lower than the sum total of interim dividend payments, a question arises how to account for those payments. The law is not clear on this and lawmakers should work to remedy this gap. In the meantime, interim dividend should preferably be regulated in the company’s articles. This should help avoid doubts if the final dividend is not paid or is declared at an amount lower than the sum total of interim dividend payments. For the full text of the article, see Rzeczpospolita on-line and here.
Payment terms had better be contractually agreed
Date: 29 January 2018