A company has an implied power to distribute its Profits to its members, unless its articles of association provide otherwise.

A dividend is one type of distribution that may be made by a company to its members. In fact, dividends are the most common type of distribution made by a company.

However, a company is under no legal obligation to pay a dividend, unless the rights attaching to its Shares specify that it must.

The ordinary meaning of 'dividend' is a share of profits, whether at a fixed rate or otherwise, allocated to the holders of shares in a company. It is used in relation to payments made to shareholders as shareholders and not, eg, by way of remuneration for services.

A dividend is typically satisfied by a direct payment of cash or by a transfer of non-cash assets (being any property or interest in property other than cash; in the Companies Act 2006, 'cash' is expressed to include foreign currency). A dividend satisfied by a transfer of non-cash assets is often known as a dividend in kind or a dividend in