Do I need to pay dividends to shareholders if my company is dormant?


I’ve changed my private limited company from active to dormant. I had four shareholders, and I used to give them annual dividends. Now that I’m dormant, do I owe them dividends? Or are they supposed to expect these dividends to stop now that I’m dormant?




No, you do not. Dividends can only be paid out when a company has available trading profits to distribute to its members. A dormant company that has never traded will not have any profits to dispense, unless it was previously trading.

If your company became dormant after a period of trading and you have surplus income in the business bank account, you will have to forfeit your company’s dormant status to pay dividends to your shareholders. However, if there is no money to dispense, you do not have to pay dividends.

2 years ago

Your answer