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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › Unlawful Dividend consequences
Dear Sir,
kindly explain he consequences of the unlawful dividend?
A dividend is unlawful when it is paid at a time when there was an insufficient level of distributable profits available for the purpose
Where this is the case the directors become personally liable to reimburse the company with the amount of the dividend
Members are not liable to repay any dividend received that has been paid out of insufficient distributable profits unless they knew or ought reasonably to have known that the payment was an illegal distribution
OK?