Paying Dividends to Shareholders

Are your clients preparing to file their annual accounts to HMRC and Companies House before the end of the financial year?

If yes, your clients’ might be considering paying dividends to shareholders i.e. employees or family members to reward this group of shareholders. To accomplish this your clients will need to have implemented alphabet shares within their articles of association.

Alphabet Shares

One way to do this is with alphabet shares, which allow your clients to allocate shares with different classes to shareholders which are recognisable by a specific letter e.g. A Ordinary share, B Ordinary share etc. These shares are most commonly used to pay different amounts of dividends to shareholders.

However, clients who want to pay dividends to shareholders with Alphabet shares will need to ensure their articles of association contain the correct provisions which identify the rights attached to each different class of share. If the correct provisions are not in place in your client’s articles each different class of share will be ranked equally.

This is where Formations Direct company secretarial team can help amend and redraft your client’s company articles of association.

With a wealth of experience spanning over 40 years and working with not only accounting firms but law firms, you can trust in our expertise and competitive pricing to provide your clients with the best bespoke company secretarial service on the market.

If you or your clients have any questions about paying dividends to shareholders or amending articles of association contact our qualified company secretarial team and a member of our talented team will be on hand to guarantee you have all the support you require to satisfy your client’s needs.

Contact our secretarial team today on 0800 085 45 05 or email our team here.

Written by Clifford Frimpong
Clifford is a professional marketer with over 10 years of experience working in email marketing, social media management and website management. Clifford has expertise in producing engaging content for the following industries: design, charity, education and company formation and is now a digital marketer and content writer for Formations Direct.