Under the law, distribution of profits or dividends may only be paid to members of a company if there are profits available for that purpose. The Companies Act 2016 requires
that the company can only make the distribution to the shareholders out of profit if the company is solvent. Previously, in the Companies Act 1965, the company can pay
dividends to its shareholders out of its profits and there is no requirement that the company must fulfill the solvency test. The aim of this paper is to look at the new requirement of
solvency test and in what circumstances the company can pay out its dividends. It also examines the effects of non-compliance with the solvency requirements and the
implications to the company and directors (if any) under the Act.
| Item Type: | Article |
|---|---|
| Creators: | Creators Email / ID Num. Mansor, Hariati hariati@uitm.edu.my |
| Contributors: | Contribution Name Email / ID Num. Chief Editor Zainon, Assoc. Prof Dr. Saunah UNSPECIFIED Editor Raja Ahmad, Assoc. Prof Dr. Raja Adzrin UNSPECIFIED Editor Soo, Assoc. Prof. Dr. Carolyn Kum Yoke UNSPECIFIED Editor Kadri, Assoc. Prof. Dr Mohd Halim UNSPECIFIED Editor Ismail, Dr. Noriah UNSPECIFIED Editor Mohd Ariff Albakri, Associate Professor Dr. Intan Safinas UNSPECIFIED Editor Khairani, Dr. Noor Sufiawati UNSPECIFIED Editor Othman, Dr. Akmal Aini UNSPECIFIED Editor Ismail, Dr. Norashikin UNSPECIFIED Editor Ahmad, Associate Professor Dr. Syahrul Ahmar UNSPECIFIED Editor Misman, Dr. Faridah Najuna UNSPECIFIED Editor Shamsuddin, Associate Professor Dr. Amanuddin UNSPECIFIED |
| Subjects: | H Social Sciences > HG Finance > Profits. Corporate profits K Law > K Law in general. Comparative and uniform law. Jurisprudence > Commercial law > Insolvency and bankruptcy. Creditors' rights |
| Divisions: | Universiti Teknologi MARA, Johor > Segamat Campus |
| Journal or Publication Title: | Insight Journal (IJ) |
| UiTM Journal Collections: | UiTM Journals > INSIGHT Journal (IJ) |
| ISSN: | 2600-8564 |
| Volume: | 5 |
| Number: | 14 |
| Page Range: | pp. 117-123 |
| Related URLs: | |
| Keywords: | Dividends; profits; insolvency test; non-compliance; implications; UiTM Cawangan Johor |
| Date: | 2019 |
| URI: | https://ir.uitm.edu.my/id/eprint/42290 |
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