Section 254T of the Corporations Act 2001 (Cth) is ‘Circumstances in Which a Dividend May be Paid’ and is extracted below.
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Section 254T of the Corporations Act 2001 (Cth) is Circumstances in Which a Dividend May be Paid and reads as follows:
Circumstances in Which a Dividend May be Paid
(1) A company must not pay a dividend unless:
(a) the company’s assets exceed its liabilities immediately before the dividend is declared and the excess is sufficient for the payment of the dividend; and
(b) the payment of the dividend is fair and reasonable to the company’s shareholders as a whole; and
(c) the payment of the dividend does not materially prejudice the company’s ability to pay its creditors.
Note 1: As an example, the payment of a dividend would materially prejudice the company’s ability to pay its creditors if the company would become insolvent as a result of the payment.
Note 2: For a director’s duty to prevent insolvent trading on payment of dividends, see section 588G.
(2) Assets and liabilities are to be calculated for the purposes of this section in accordance with accounting standards in force at the relevant time (even if the standard does not otherwise apply to the financial year of some or all of the companies concerned).
The maximum penalty for the offence of Circumstances in Which a Dividend May be Paid is:
2 years imprisonment.
However, it should be kept in mind that maximum penalties are reserved for the most serious cases.
Your legal team will be able to advise you of the essential elements the prosecution would need to prove in order to establish the offence, whether those elements are capable of being established in your particular situation, the most effective and efficient way forward and the likely outcome.
Why Sydney Criminal Lawyers®?
Choosing the right legal team to defend your reputation and interests can be a difficult process.
However, it is always important to look at a firm’s experience and results when making this decision.
At Sydney Criminal Lawyers®, we have extensive experience defending and winning some of the most complex criminal matters – so you can rest assured that you are in safe hands.
Our criminal law specialists will take the time in every case to carefully scrutinise all the evidence in order to identify problems with the prosecution case at an early stage in the proceedings.
Where issues are found, our lawyers will write to the prosecution asking to have the charges dropped on this basis – often sparing our clients the considerable time and expense associated with defended hearings.
However, should your matter proceed to court, our senior lawyers will represent you and present a strong defence case to maximise your chances of being found ‘not guilty.’
Our senior lawyers are highly skilled advocates who have been recognised for their expert knowledge of the criminal law, as well as their ability to obtain excellent results in difficult cases.
We can assist you in avoiding the harsh penalties imposed by the law if you simply wish to plead guilty – in these cases, our experienced advocates can prepare and present compelling sentencing submissions which focus on any positive factors of your case.
For the best defence in your case, get the experts on your side today. Call us now on (02) 9261 8881 and book your FREE first conference with our criminal law specialists.