Legal Aspects of Dividend Payment in a Limited Liability Company

Abstract

The objective of the study was to identify forms, main objectives and regulatory measures that can improve the development of the legal regulation of dividend payments in a limited liability company. The study involved three methods: direct observation, comparison, and analysis of the content of documents that provide legal regulation of dividend payments at the state and interstate levels. Eight important factors influencing dividend policy are presented. The success of business activity depends directly on the regularity of profits and the amount of capital of the company, while it is inversely dependent on the regularity and size of dividends. It is concluded that the type and form of dividend policy is partly governed by the rule of law and partly determined by non-legal business factors. An optimal dividend policy means that there must be an appropriate balance between the payment of current dividends and the future growth of the company's profits. In this case, the procedure established by law and the sequence of shares preceding the payment of dividends indicates the partial entrepreneurial freedom of the participants in this case.