Does a company director receive dividends?

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I’ve got a quick question about dividends. I’m aware this is something you should provide regularly to your limited company shareholders, but I am curious as to whether I need to provide the same courtesy to all company directors. Is it compulsory/normal for a company director to receive dividends?

Answers

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Company directors need only receive dividend payments if they are also shareholders in the company. Any shares they hold must have dividend rights attached to them if they are to receive a distribution of company profits. It is possible, however, to appoint someone as just a director without making them a shareholder.

It is commonplace for company directors to also be shareholders because many people set up and run a company on their own or with only a few people. Dividend payments can be used to top up a director’s salary, thus allowing you to pay yourself or other directors in a tax-efficient manner.

a year ago
 

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