Distribution of profits under the companies act 2016: satisfying the Insolvency Test / Hariati Mansor

Mansor, Hariati (2019) Distribution of profits under the companies act 2016: satisfying the Insolvency Test / Hariati Mansor. Insight Journal : International, Refereed, Open Access, Online Journal, 5 (14). pp. 117-123. ISSN 2600-8564

Abstract

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.

Metadata

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 : International, Refereed, Open Access, Online Journal
UiTM Journal Collections: UiTM Journal > 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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