Paying yourself dividends from a limited company
For many owners of a limited company, dividends are an important way to take money out of the company alongside a salary. This guide explains how to distribute dividends legally and what to consider in their taxation.
You will need
- The adopted financial statements
- The company's bank details and cash flow forecast
- A template for the minutes of the general meeting
- The company's net assets for tax purposes (from your accounting firm)
Steps
Check the distributable equity
Dividends can only be paid from unrestricted equity, which is shown in the adopted financial statements. Share capital cannot be paid out as dividends.
Do a solvency test
Think about the balance between salary and dividends
Understand dividend taxation
Hold a general meeting
Record the decision in the minutes
Withhold tax
Report dividends in the annual information return
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