The distribution of dividends is often a central topic. But the CO sets clear rules – we clarify what is permitted.
Have legal questions (CO, employment, taxes) for your company reviewed now – directly through our digital legal assistant Jurilo
Legal Foundations: CO Art. 675–677
· Distributions only through the accounting retained earnings and accumulated profits, not through reserves
· Review of the availability of freely distributable equity
· No capital loss may arise – in this situation distributions are not permitted
Process of a Dividend Payment
1. Prepare annual financial statements & approval by GM
2. Determine the appropriation of retained earnings
3. Determine distribution per share/shareholder stake
4. Registration with debt collection office + tax register
Special Cases
· Interim/distribution: possible, but stricter conditions
· Withholding tax (35%) must be remitted
· Holding companies enjoy tax benefits under certain circumstances
FAQ
Can a corporation cover losses and still pay dividends?
No – accumulated losses can only be offset with future annual profits.
Must a dividend be taxed?
Yes – shareholders must tax dividends as income, deductions possible through partial taxation.
Have legal questions (CO, employment, taxes) for your company reviewed now – directly through our digital legal assistant Jurilo
