Each partner or shareholder is entitled in principle to dividends, with a right to vote at general meetings. In the event of an assignment, the right to dividends is transferred with the title to the purchaser.
The profits and SVG Forex License of a company can be used either for the company, being reinvested to improve or buy equipment, improve its products, and create or develop others or even redistributed in dividends.
What is not distributed in dividends is said to be “set aside” in accounting terms. The setting aside takes the form of cash, investment or possibly purchase of company. It increases the capital of the company: they remain in the capital of the company. This reserve and SVG Forex License may be distributed as a dividend later.
The methods of calculation and distribution
Dividends can only be distributed if the company has made a profit, either in the previous year’s financial year or in the past, on the company’s reserve. Profits must exist without being used by the company.
Reinvest or distribute? the decision belongs to the shareholders, who decide at the end of an annual general meeting at the end of the year. The decision and the distribution occur only in year N, after the end of the previous year, N-1. However, it remains possible to make interim dividends, by using additional legal procedures.
Dividends are calculated at the end of the financial year of the previous year, deducting first all the expenses, the previous losses, then the corporation tax, applied to the profit. We must also consider the legal reserve, mandatory for all companies: Each company must have a reserve of at least 10% of its capital. As long as this threshold is not reached, it must reserve each year 5% of its profit.
Dividend types and payment terms
Although often thought of as such, dividends are not necessarily distributed in the form of money. The dividend can take two forms: cash, either in cash transferred to the bank account of the shareholder.
In kind, by the payment in social assets – securities or shares – in goods produced, real estate or with the constituent elements the assets of the company. For this purpose, the property distributed between partners must be of the same nature, and each partner must be able to receive an integer of the property distributed in dividend.
What are value investments?
These are historically solid companies with a long history, which for some reason are trading below their intrinsic value. Those who seek value, in general are aiming to take advantage of moments of market panic, or when the industry is hit to take advantage of the irrationality of the players and buy value at cheap prices.