Dividend

Is a form of payment of net profit to shareholders. In Singapore, the dividends paid are tax-exempt in the hands of shareholders as the net profit is already nett of corporate tax.

Dividend can be interim or final depending at which stage they are being declared to be paid to shareholders.

It is important to note that interim dividend can be approved by director(s) during the financial period. However, under the Act, it is important to note that dividend can only be paid out of profits of the company and not capital. Therefore, directors when declaring interim dividend have to be mindful on whether there will be profit at the end of the year. Otherwise, this is a breach of the Act.