What is a Dividend

A dividend is a payment made to the shareholders of a registered Company. It is a distribution made from a business after all its costs and taxes are accounted for.

Dividends generally cannot be paid if a business has made a loss or has insufficient reserves on the balance sheet. And any payments of this nature will be deemed illegal.

People receive dividends when they invest money or own shares in a Company. That includes people who are self-employed and operate through a Limited Company. That’s because there are certain tax advantages they can use to minimise their tax bill.