Editing Dividend (section)

===United Kingdom===
The rules in Part 23 of the [[Companies Act 2006]] (sections 829–853) govern the payment of dividends to shareholders. The Act refers in this section to "distribution", covering any kind of distribution of a company's assets to its members (with some exceptions), "whether in cash or otherwise". A company is only able to make a distribution out of its accumulated, realised profits, "so far as not previously utilised by distribution or capitalisation, less its accumulated, realised losses, so far as not previously [[written off]] in a reduction or reorganisation of capital duly made".<ref>UK Legislation, [https://www.legislation.gov.uk/ukpga/2006/46/part/23 Companies Act 2006: Part 23], accessed 26 October 2023</ref>

The [[Government of the United Kingdom|United Kingdom government]] announced in 2018 that it was considering a review of the existing rules on dividend distribution following a consultation exercise on insolvency and corporate governance. The aim was to address concerns which had emerged where companies in financial distress were still able to distribute "significant dividends" to their shareholders.<ref name=bunney /> A requirement has been proposed under which the largest companies would be required to publish a distribution policy statement covering dividend distribution.<ref>Department for Business and Trade, [https://www.gov.uk/government/publications/new-transparency-over-resilience-and-assurance-for-big-business/corporate-reporting-the-draft-companies-strategic-report-and-directors-report-amendment-regulations-2023 Corporate reporting: The Draft Companies (Strategic Report and Directors' Report) (Amendment) Regulations 2023], published 19 July 2023, accessed 23 August 2023</ref>

The law in [[England and Wales]] regarding dividend payment was clarified in 2018 by the [[England and Wales Court of Appeal]] in the case of ''Global Corporate Ltd v Hale'' [2018] EWCA Civ 2618. Certain payments made to a director/shareholder had been treated by the High Court as ''[[quantum meruit]]'' payments to Hale in his capacity as a company director but the Appeal Court reversed this judgment and treated the payments as dividends. At the time of payment they had been treated as "dividends" payable from an anticipated profit. The company subsequently went into [[liquidation]]; an attempt to recharacterise the payments as payments for services rendered was held to be unlawful.<ref>Mayer Brown, [https://www.mayerbrown.com/-/media/files/perspectives-events/publications/2019/01/english-court-of-appeal-provides-clarification-reg/files/updateenglishcourtofappealprovidesclarificationreg/fileattachment/updateenglishcourtofappealprovidesclarificationreg.pdf English Court of Appeal provides clarification regarding the regulation of dividend payments to shareholders], published January 2019, accessed 26 October 2023</ref>