Can an organization pay dividends monthly?

Which companies pay stock dividends every month: full review

Investment greetings, friends! In Russia, companies usually pay dividends once a year, less often - once every six months, and very rarely - once a quarter. While in the United States, quarterly payment of dividends is considered rather the norm, and annual dividend payment is considered an exception to the rule. Moreover, there are companies that pay dividends literally monthly. Next is an overview of companies that pay dividends monthly.

Disclaimer

Just in case, let me remind you that everything said below is not an investment recommendation, a call to action or an incentive to buy shares. All decisions to purchase shares are made at your own risk based on your investment strategy.

All data on dividend yield and stock market value are given at the time of writing. Since quotes change every minute, and dividends may change, the data in the article may not coincide with the current data that you will receive during independent calculations. This is for those commentators who are trying to teach me how to calculate the correct dividend yield

Source: https://alfainvestor.ru/kakie-kompanii-platjat-dividendy-ezhemesjachno-polnyj-obzor/

What is the dividend cut-off?

This is precisely the closing date of the register. After the end of the trading session, investors who have company shares in their portfolio are entitled to dividends.

But there is one caveat.

As a rule, just before the dividend cutoff (several days in advance), quotes begin to rise. Everyone wants to participate in the profit sharing. There is significant demand for securities. And according to the law of the market, if demand exceeds supply, prices increase.

The day after the dividend cutoff, the value of the shares themselves drops sharply. Usually by the amount of promised dividends.

Why?

The company has already recorded holders and for many traders who are focused on short-term trading, the shares are no longer of interest.

And you can observe the dividend gap (gap on the chart). Here's what it looks like using Severstal as an example.

The company set shareholders a 3.97% dividend yield. The next day, quotes fell by almost the same amount - 4.05%.

Dividend payment terms. How to pay dividends to founders

What are the deadlines for paying dividends in 2021, the payment procedure, what are the restrictions on paying dividends to founders - the answers to these and other questions are in the article.

Companies have the right to distribute net profit to pay dividends to founders - individuals or legal entities. In this article we will tell you in detail what dividends are, when and how to accrue and pay them in 2021, as well as what are the consequences of violating the deadlines for their payment.

What are dividends

That part of the profit at the end of the calendar year that the founders of the organization receive as a result of their activities is usually called dividends.

In essence, these are income payments in favor of the company’s owners, which are made at the end of the year, when the accountant determines the net profit and the owners decide to distribute it.

In tax accounting, not any income is considered a dividend, but only that which is distributed in proportion to the shares of participants in the authorized capital.

Important!

Since the new year, a rule has been in effect - when a participant leaves their company, he receives appropriate payments (cash, part of the property, fixed assets, products, etc.), which are now considered dividends and the amount of income tax must be calculated and paid from them to the budget. Not the entire amount is subject to taxation, but only that part that exceeds the value of the shares (or share) of the retiring owner.

What determines the timing of dividend payments?

What determines the timing of dividend payments? First of all, it depends on the legal form - it is important whether you are a joint stock company or a limited liability company. Also, for joint-stock companies, when distributing income, the fact which shares you own - ordinary or preferred - will be significant. Pay attention to these factors.

Restrictions on payment of dividends to founders

So, at the end of the year you compiled financial statements and saw that you received a net profit. At the meeting of participants, it was decided to distribute it partially (or fully) for payment to participants in the form of dividends. Is this always possible without violating the law? Let's see what the restrictions are.

1. The authorized capital of the company must be fully paid by the participants - no matter in cash or property (as agreed by the founders). If this is not the case, then the company does not have the right to pay dividends.
2. It is impossible to distribute the profit received for previous periods if you did not receive it at all this year (that is, there is a loss).
3. Participants will not receive their income in the form of dividends if the company faces bankruptcy if part of the profit is paid out (or the entire net profit for the reporting year is distributed) or if the company has already been declared bankrupt. In this case, you will not see dividends until the company emerges from the crisis.
4. The amount of net assets must be greater than the amount of the authorized and reserve capital of the organization, in this case it is possible to pay dividends. There is a ban on their payment if net assets decrease (and are less than the size of the reserve fund and authorized capital of the company) in the event of such payment.

How to calculate dividends that will suit the owners and will not damage the business

How to spend the company's net profit - use it to pay dividends or finance the business - is decided by the owners. The financial director will have to justify to the owners the amount of dividends that is safe for the company.

Determine the compromise amount of dividends

How to calculate dividends in an LLC

Before dividends are paid, they must be accrued. At the end of the quarter, half-year or year, after-tax profits are distributed among the LLC participants. To do this you need:

• decide on the accrual of dividends;

Dividend payment terms

When you are a member of an LLC, you have the right to receive your share of income no later than 60 days from the decision to pay dividends. If the organization’s charter provides for a different period, you have the right to adhere to it.

At the same time, you can distribute net profit at least every quarter, six months or year - as the founders themselves decide, there are no restrictions.

If the LLC participants decide to distribute net profit in a special, special manner, this must be agreed upon between all participants and written down in the minutes of the meeting, otherwise everything will depend on the participants’ shares in the authorized capital.

For Joint Stock Companies, profits are distributed, as a rule, once a year, based on the results of the reporting period. And this is done only according to the financial statements compiled and approved by management.

But you will have to pay out a little faster than for a limited liability company. A period of 10 days is given for this from the moment it was determined who will receive the payments, and from 10 to 20 days from the moment the decision was made to pay income to shareholders.

Shareholders can set other deadlines, but to do this they need to be written down in the charter.

Taxes

Dividends must be taxed. If the owner is an individual, then you need to calculate and withhold 13% personal income tax. And also transfer to the budget the independently calculated amount of tax on the day the income is paid.

The tax rate increases by 2 percentage points if the owner is a non-resident individual, that is, a foreign individual.

If dividends are paid to the owner-legal entity, then income tax must be accrued and paid on such income (the payment deadline is no later than the day the payment is made):

1. If dividends are paid to a parent company that owned more than 50 percent of the authorized capital for a period of more than 1 calendar year, the tax rate will be 0%.
2. In other cases, the rate of 13% will apply.
3. For foreign companies there is an increased tax rate of 15 percentage points.

How to calculate the tax amount

To calculate the amount of tax, take the amount of accrued dividend payments for all participants minus all payments already received (payments received both in the past and in the current period are taken into account here) and multiply by your share in the authorized capital as a percentage. This way you will receive a tax base for income tax on dividends you receive in the current year. See also what are the income tax rates in 2021.

For late payment, the company faces a fine of twenty percent of the non-payment amount, as well as a penalty at a rate of one three hundredth for each day of delay from the key rate. The amount of fines and penalties usually amount to a significant amount, so income taxes should be withheld and remitted in a timely manner.

Important! Dividends can be paid not only in monetary terms, but also in company property or manufactured products.

However, this must be agreed upon at a meeting of all participants and recorded in the minutes of the meeting with a clear listing of what and in what quantity is to be transferred to each owner.

The timing of the transfer of property is the same as if dividends were paid in cash.

But how can you withhold and pay the amount of income tax if the payment is not in cash, but in kind? Or rather, why should we hold back? In this case, the responsibility for calculating and paying tax lies with the recipient of the property. In this case, the tax amount must be transferred before July 15. And the declaration to the tax authorities is also submitted independently, for individuals - before April 30 in form 3-NDFL, and organizations - in form 2-NDFL before March 1.

If you accrued the founder’s income according to the minutes of the meeting, but did not pay him dividends, you will still pay tax.

However, remember that in this case there is a possibility that you will have to pay the founder a certain percentage for using someone else’s money.

It is also calculated at the key rate, which is in effect at the time the decision on payment is made and during the corresponding period of delay.

What happens if you violate the deadline or procedure for paying dividends?

For companies that violate the procedure for paying dividends or delay payments, there is an article of the Code of Administrative Offenses with a whole system of fines both for the company (from 500,000 to 700,000 rubles) and for officials (from 20,000 to 30,000 rubles). If the chief accountant does not make the payment (for example, he forgot or for another reason), he faces a fine of 2,000 to 3,000 rubles.

What should a shareholder or LLC participant do if they have not received their dividends on time? He can apply for them within three years from the date of the decision to distribute the company’s profits and pay income to the owners. You can set a different period yourself (up to 5 years), and indicate this as a separate clause in the organization’s charter.

Source: https://www.fd.ru/articles/159284-sroki-vyplaty-dividendov

How does a company know who needs to pay and how much?

All data on shareholders is stored in an electronic register. But the problem is that during one trading session tens of millions of shares are bought and sold. Tens, hundreds of thousands of shareholders change every day.

Therefore, a date is selected (known in advance to everyone) or the date of closing the register on which all shareholders will receive dividends.

It turns out that in order to be eligible to receive dividends, it is enough to be the owner of the shares for only one day.

Distribution (payment) of dividends to LLC participants in 2021

Dividends are the income remaining after paying all necessary taxes and payments, which can be distributed among the LLC participants.

How often can an LLC pay dividends?

Dividends can be distributed quarterly, semi-annually or at the end of the year. The frequency of payments is prescribed in the company's charter.

The best option is payment at the end of the year. If dividends are distributed before the end of the financial year, they are called interim dividends. There is a risk of recognizing such dividends as remuneration if at the end of the year the profit turned out to be less. And in this case, insurance premiums will be charged on the amount of payments, which will have to be paid additionally.

When dividends cannot be distributed

Profit cannot be distributed in the following cases:

• the authorized capital of the LLC has not been fully paid;
• the company has signs of bankruptcy or will meet such signs after paying dividends;
• the value of net assets is less than the authorized capital and reserve fund, or will become less as a result of the distribution of profits;
• the actual value of the participant’s share (part of the share) has not been paid;
• The company has an uncovered loss according to its financial statements.

Net assets and reserve fund

Net assets are the difference between assets and liabilities, which is determined according to accounting data. Assets include all of the company's property (fixed assets, inventories, cash, accounts receivable, etc.). Liabilities include the LLC's debts (accounts payable).

The reserve fund is a kind of “insurance” for the company in case of compensation for losses from business activities. It is created at the request of the LLC participants, in the amount provided for by the company’s charter, but not less than 5% of the value of the authorized capital.

If, at the end of the financial year, the value of net assets has become less than the authorized capital and reserve fund (if any), within six months after the end of the year it is necessary to take measures to increase net assets (at least to the size of the authorized capital) or reduce the authorized capital or even liquidate OOO.

How to distribute dividends in 2021

The procedure for paying dividends can be divided into 3 stages:

We check net assets and determine the total amount of dividends

This stage is preliminary and its main goal is to understand whether it is possible to distribute profits in the company at the moment.

As mentioned above, the size of net assets must be greater than the authorized capital and reserve fund. The calculation of the value of net assets is carried out in accordance with Order of the Ministry of Finance No. 84n dated August 28, 2014.

To determine the total amount of dividends, we subtract the amount of authorized capital from net assets. The amount received can be used in whole or in part for payments to LLC participants.

We decide on the payment of dividends

The company's profit is distributed based on the minutes of the general meeting of participants or the decision of the sole founder of the LLC.

note

, payment of dividends is a right, not an obligation of the company, and if the corresponding decision has not been made, the participant will not be able to receive a profit (part of the profit) even through the court. Moreover, if the decision is made, it cannot be canceled; in this case, if the payment of dividends ultimately does not take place, the amount due can be recovered by the court.

At the general meeting of participants, the financial statements are approved and the amount of dividends for each founder is determined. Profit is distributed in proportion to the shares in the authorized capital of the LLC, or in the amounts specified in the company's charter.

Starting from September 2014, the minutes of the meeting of participants must be certified by a notary.

This requirement can be circumvented in the following way: to add to the agenda an item stating that decisions made are certified by the signatures of all present participants, or to add in advance to the charter an item with approximately the following content: “The adoption of a decision by the general meeting of the Company’s participants and the composition of the company’s participants who were present at its adoption, confirmed by the signing of the minutes by the chairman and secretary of the general meeting, who are participants in the company"

.

We pay dividends

Payment of dividends must occur within 60 days after the decision is made. A shorter period can be specified in the charter of the LLC or in the minutes of the meeting (decision of the sole founder).

Profit can be transferred to the participant to a bank account or in other ways specified in the protocol (decision). Payment of dividends (part thereof) with property is allowed.

If a participant misses the payment deadline, for three years he retains the right to apply to the LLC to receive the due profit. This period may be increased by the charter to five years.

note

, that the missed deadline is not restored (exception - absence due to the use of violence and threats against the participant, for more details, Article 28 of the Federal Law No. 14 of 02/08/1988). The unreceived part of the profit is restored as part of the company's retained earnings.

Tax on dividends in 2021 (NDFL)

Insurance premiums are not charged on the amount of dividends paid to individuals, but are subject to personal income tax withholding.

For individuals – residents of the Russian Federation, the personal income tax rate is 13%.

For non-resident individuals, a rate of 15% applies.

The tax rate for personal income tax is determined based on the status of the participant (resident/non-resident) on the date of payment of dividends. Tax is withheld from each payment, no later than the day following the day of transfer of dividends (Articles 226, 275 of the Tax Code of the Russian Federation).

Note

: Personal income tax is not withheld from profits paid by property. But the company must report this to the Federal Tax Service within a month from the date of payment (clause 5 of Article 226 of the Tax Code of the Russian Federation).

If the LLC participant is a legal entity, dividends are subject to income tax. In some cases, a preferential zero rate is applied if the share of participation in the company is at least 50% for 365 days.

The income tax rate for a participant - a Russian company is 13%, for a participant - a foreign company, a rate of 15% is applied.

Source: https://www.malyi-biznes.ru/dividendy/

Is it possible to pay dividends monthly in LLC

During the meeting the following issues are resolved:

• what share of the profit received is used for payment;
• how it should be distributed among the members;
• within what time period the payment must be made.

What documents can be developed for the payment of dividends:

• the decision on payment made by the founder;
• minutes and the corresponding decision of the general meeting;
• order for accrual and payment.

It should be noted that there is no special document for processing payments. The organization can develop the form independently. Standard forms can also be used, which are filled out when funds are transferred to another account or funds are issued from the cash register: payment order, cash order, etc.

• Distribution of dividends between participants.

Can an organization pay dividends monthly?

OS when leaving an LLC: tax risks, No. 11

• Paid dividends returned: what to do, No. 8
• Dividends in 2021: without a hitch, No. 6 When LLCs and JSCs can pay dividends, No. 6 How to report on dividends paid, No. 6
• We draw up a contribution to the company’s property, No. 2
• 2017

1. VAT on the transfer of property to increase the company’s net assets, No. 23Help from participants: farewell to the benefit, No. 23
2. Price control when buying and selling shares in an LLC, No. 17
3. If net assets have become lower than the authorized capital, No. 13
4. Payment of dividends in the absence of profit or money, No. 8
5. Dividends due to withdrawal from LLC are not paid, No. 7
6. A participant leaves the LLC without money, No. 6
7. LLC pays dividends to residents, No. 4 Filling out LLC certificate 2-NDFL on dividends for 2021, No. 4

2016

Is it possible to pay dividends to LLC participants monthly?

This norm provides for the possibility of establishing a different procedure for the distribution of profits between the company's participants by the charter of the company upon its establishment or by amending the charter of the company by decision of the general meeting of the company's participants, adopted unanimously by all the company's participants. Those. based on the literal meaning of Art. 28 of Law No. 14-FZ, the company has the right to decide on the distribution of net profit only quarterly, once every six months or once a year. The company also has the right to amend the company's charter regarding changes in the procedure for distributing profits between participants. In our opinion, the frequency of decision-making (quarterly, once every six months or once a year) cannot be attributed to the procedure for distribution of profits, since the legislator clearly defined the possible frequency of decision-making and highlighted this as a separate paragraph 1 of Art. 28 of Law No. 14-FZ.

Monthly payment of dividends in LLC: is it possible or not?

For example, the net asset value corresponds to the amount of the authorized capital. It is clear that any payments to the founders will reduce the company's working capital.

Reducing the authorized capital requires replenishing it, stipulating a smaller amount in the Charter, or liquidating the LLC. In addition, the presence of debts to retired founders also makes it impossible to distribute profits.

By law, each LLC participant upon leaving the company has the right to receive the value of his share. Therefore, the shares of former participants are paid first.

In 2021, there is no need to pay the authorized capital before registering an LLC. Participants can pay their part of the payment within 4 months after registration. But during this time, the organization may have net profit that can be distributed. But for payment, the authorized capital must be paid in full.

Dividend payment terms

Moreover, payment can be made not only in cash, but also in property, if such an option is fixed in the Charter. If a participant has not received the required dividends within the period established by law, he has the right to file a claim in court.

Failure to meet deadlines is considered a violation of the rights of the founder. Important! When determining the frequency of dividend payments, participants must be guided by the Charter. If the Charter states that profits are distributed once a year, then dividends cannot be paid more often.

To change the schedule, you must make appropriate changes to the constituent documents.

Is it possible to pay dividends to LLC participants monthly?

Important The decision to determine the part of the company's profit distributed among the company's participants falls within the exclusive competence of the general meeting of the company's participants. The decision is made by a majority of the total number of participants in the company, unless the need for a larger number to make such decisions is provided for by the charter of the company;

• when distributing profits between several participants, it is necessary to take into account that dividends must be paid in proportion to the shares in the authorized capital of the company. The company's charter may establish a different procedure for distributing profits among the company's participants.

In our opinion, based on the above, we can conclude that the decision to pay monthly dividends to the company’s participants is a violation of Art.

28 of Law No. 14-FZ.

Attention

The founders of LLCs and other organizations are interested in what regulatory documents regulate the procedure for paying dividends, what article of the law allows you to calculate the amount of payments, how to document everything, and whether such a payment is subject to taxation or whether it is a class of payments that do not provide for mandatory payments to the budget. Main provisions General base Participants receive dividends exclusively from net profit, that is, after the tax has been paid and all transfers to each fund have been made. The rule regarding the procedure for determining the amount of profit to be distributed is enshrined in Article 42 of the Federal Law on Joint Stock Companies No. 208.

The net profit of such organizations is determined according to accounting data. There is no such provision in the LLC law.

Is it possible to pay dividends monthly in an LLC in 2018

Dividends cannot be distributed in the following cases:

• payment of the authorized capital is not in full;
• the share of the participant leaving the company has not been paid;
• there are signs of bankruptcy or the distribution of profits will contribute to their occurrence.

What is their role? The main task of paying dividends is to ensure income for company participants. Any LLC is created for the purpose of obtaining benefits, that is, commercial activities must make a profit. The basis for starting work is the authorized capital.

In the process of activity, the company's assets are multiplied by generating income. But in addition to income, the organization has certain expenses.

It is necessary to pay wages to employees, reimburse production costs, pay taxes and mandatory fees.

Is it possible to pay dividends monthly in an LLC in 2017

Source: https://02zakon.ru/mozhno-li-vyplachivat-dividendy-ezhemesyachno-v-ooo/

Is it possible to pay dividends monthly?

Is it possible to pay dividends for the year before March 1?

No. After all, dividends for the year are transferred based on annual results. And the annual results are approved at the general meeting. It should be carried out no earlier than two months after the end of the financial year (Article 34 of Law No. 14-FZ and paragraph 1 of Article 47 of Law No. 208-FZ). Therefore, dividends should not be paid before March 1.

— If there is one founder, can dividends be transferred earlier than March 1? After all, the sole owner is not obliged to hold a meeting?

- No. The law does not separate one or more founders.

— Is it possible to pay dividends monthly?

— The law does not provide for monthly payment of dividends. Thus, an LLC has the right to distribute profits between the founders quarterly, once every six months or once a year (clause 1 of Article 28 of Law No. 14-FZ), and a JSC - based on the results of the first quarter, half a year, 9 months, financial year (clause 1 Article 42 of Law No. 208-FZ).

Other payments - income!

Enter the site

And additional taxes.

— Can profits be distributed disproportionately to the share of the founders?

— It is possible to distribute profits disproportionately to shares if this is the decision of the company participants themselves or such a procedure is provided for by the charter.

— Does an LLC have the right to transfer dividends from the cash register, since this is money, the company’s income?

Payment of dividends in cash is possible only if the amount is withdrawn from the current account and credited to the cash register. Cash proceeds cannot be directly spent on transferring dividends.

Cash discipline, accounting and tax accounting.

When can dividends not be paid????

1.If the authorized capital is not paid in full. 2. If at the time of payment of dividends the value of the company’s net assets is less than its authorized capital and reserve fund or will become less than their size as a result of payment. 3. If the company is declared bankrupt.

4. Other cases when an organization cannot make a decision on the distribution of profits between participants or shareholders, for limited liability companies are specified in Article 29 of Law No. 14-FZ, for joint-stock companies - in Article 43 of Law No. 208-FZ

When should dividends be paid?

The period and procedure for paying dividends are prescribed in the company's charter or a decision of the general meeting of participants.

Only the deadline for payment is limited - no later than 60 days from the date on which the corresponding decision was made.

If specific deadlines are not determined either by the charter or by the decision of the general meeting of participants, dividends must be paid within the same 60 days (clause 4 of article 42 of Law No. 208-FZ and clause 3 of article 28 of Law No. 14-FZ)

How to arrange the payment of dividends to the founders????

There is no special document that needs to be used to formalize the payment of dividends to the founders. The issuance of money is formalized by settlement or cash documents: - expense cash orders;

- payment orders

Dividends are profits received from the activities of a company in the form of an LLC, distributed among members of the company.

Dividends cannot be paid monthly

The procedure for making payments is defined in the law adopted in February 1998 (No. 14-FZ). By virtue of this legislative act, dividends to members of the company can be paid at various periods of time:

1. Once a quarter.
2. Semiannually.
3. Once every 12 months.

The distribution of profits can be carried out more often, but only if a unanimous decision was made during such a period.

What are dividends formed from?

Lawyers on our portal are often asked the question of how much money an LLC should pay dividends from. The law indicates that only net profit (i.e. assets, after payment of all relevant taxes) can be taken into account as income distributed among members of an LLC.

In some cases, by decision of the participants, a special fund can be formed and it is from its budget that profits will be paid to the members of the company.

When is it possible to introduce restrictions on the payment of dividends?

A decision on the distribution of company profits cannot be made if:

• The start-up capital of the LLC has not been fully paid.
• Before the full value of the share has been paid in cases prescribed by law.
• At the time of the decision, the LLC has grounds for bankruptcy.
• The cost of net profit is less than the starting capital and reserve fund.

In the last two cases, the LLC cannot pay dividends to its participants even despite the decision made by the participants.

After the above circumstances cease to apply, the LLC is obliged, in the manner prescribed by law, to distribute profits among the members of the company.

What to do if the LLC does not pay dividends?

Failure to pay dividends to members of the company entails liability for the company. According to the law, a legal entity has 60 days from the time the decision was made in order to pay the existing debt to the company member.

If the debt on dividends has not been paid on time, then the person who contributed to the capital has the authority to make demands on the management of the LLC within 3 years. This period begins to run from the moment of delay on the part of the enterprise.

By decision made unanimously at a meeting of members, the period may be extended, but not more than by 5 years.

Payment of dividends in installments is possible, but only if this issue was adopted at a meeting of the company's participants.

Do I need to pay tax on dividends?

Definitely yes! How are dividends taxed?

All profits received from dividend payments are classified as personal income (personal income tax) or income tax.

The standard tax rate is 13%.

Good news. The state exempted individuals from paying taxes on their own.

A broker is a tax agent. And he himself withholds the required taxes in favor of the budget.

At the time of payment of dividends, part (13%) of the amount received goes to pay taxes.

The investor receives the amount already cleared of taxes.

So, ordinary investors don't need to bother. They will do everything for you.