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You should note that the entire profit of the company you own shares in would not normally be paid as dividends. The company must retain some profit for reinvestment to keep the business operating profitably. The board and directors will determine how much of the profit needs to be retained for this purpose. The annual accounts of your company will give details of the money retained and the profits that were set aside for paying dividends to shareholders. If you have an issue with these payments and have enough shares, you can table a motion for your company’s next AGM (Annual General Meeting) to discuss the issue. You may like to take legal advice about your particular circumstances from a company solicitor. There is actually no legal obligation for your company to pay a dividend to you, but of course you bought shares for this purpose. If your company decides not to pay a dividend in any given year, the board of directors must clearly state their reasons. In addition, you should consult your business’s Memorandum of Association for any special provisions regarding the issuing of dividends. If you feel your company should be paying dividends, you are advised to obtain legal advice from a company solicitor who can help you fight your case. Also, if your company states that it will be paying a final dividend and subsequently does not make this payment to you, this would give you the right to sue the company. If you decide on this course of action, you must have the support and advice of a company solicitor.
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