If a company makes an unlawful dividend, who may be involved in making good the distribution?
A.The company only
B.The directors only
C.The shareholders only
D .The company, the directors and the shareholders
. If a company makes an unlawful dividend,it is the directors who declare the dividend so they will be liable and members if they were aware of it was unlawful and they accepted that dividend
Ans is d
Can u plz explain how everyone is liable
Ask the Tutor ACCA LW
Question from chp 14 capital maintenance
4y ago#1So, really your question is 'Why is the company joined in liability?'
The directors merely 'propose' the dividend and the shareholders approve the proposal by passing the resolution at the general meeting
But, in so passing, the shareholders are acting in their capacity as 'the membership' or 'the company'. We often hear about 'the company in general meeting did ....' and the actions of the shareholders as a body are therefore the actions of the company
OK?
Thank u sir
4y ago#3No worries - happy to help
Sign in to reply to this topic.