The distribution of annual profits and interim profits in the form of dividends can be determined by the decision of the general meeting of shareholders in a limited liability company
When a shareholder is entitled to demand a dividend The right of ashareholder to receive a dividend arises from the moment of becoming a shareholder of the society, and the right to demand a dividend – from the moment of making a decision on the distribution of profits by the general meeting of shareholders of the company.
In order for the dividend to be distributed and the shareholder to be able to request its receipt, it is necessary to make a decision on the distribution of the dividend by the general meeting of shareholders of the company Often, minority shareholders face a problem when majority partners unfairly use their rights and ability to influence decision-making.
Majority shareholders often do not make decisions on dividend distribution, thus putting minority shareholders at a disadvantage. Minority sharehlders, when drafting the articles of association and/or shareholders’ agreements, should precisely define the preconditions and periodicity of dividend distribution, which will help them exercise the right granted to them by the law, in particular, the right to receive and demand dividends.
