Dividend waiver model for entrepreneurs

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As reported today on ContractorUK, a shareholder has the right to waive their right to receive a dividend from the company, writes Siddharth Agarwal, tax director of DNS associates.

This waiver of dividends would allow the company to keep the funds and use them for specific purposes. But the waiver should be used for genuine business reasons, and furthermore, it is recommended that you consider seeking specialist tax advice on settlement legislation in order to avoid falling under the 2005 Law on Settlement. income tax (trade and other income).

To waive his right to the dividend, the shareholder must provide the company with a waiver in the form of a formal document which must be signed, dated and certified. The waiver should ideally be received by the company before the right to receive the dividend arises.

Below is a template that entrepreneurs can use for their dividend waiver. Also available for download, this dividend waiver template is ideal for any shareholder who wishes to waive their rights to receive a dividend from a company.

Please note that the required information must be inserted between the marked fields and can be adapted according to your particularities and requirements.

***** MODEL FOR WAIVER OF DIVIDEND BEGINS *****

The directors

Company Name>

Company address Line 1>

Company address line 2>

City>

Postal code>

Dated>

Ref: Dividend waiver

I, last name and first name>, the registered holder of number of shares> share class> £ sharesnominal value of the shares> each in the capital of the Company.

In order to indicate the reason for waiving dividend rights, example: developing the business>, I hereby irrevocably waive all rights intermediate / final> dividend amount> per action recommended by the directors on declaration date> for the year ended End of year date>.

In addition, I am not entering into any arrangement which means that a “bonus element” is defined under settlement legislation at ITTOIA05 / PART5 / CHAPTER5 or to circumvent company law and tax authorities.

Signed as deed by:

Sign: ……………………………………………

Your full name>

Date: ……………….

In the presence of:

Sign: ……………………………………………

Name of witness>: ……………………………………………

Address: ……………………………………………

Address: ……………………………………………

Postal code : ……………………………………….

Date: ……………….

***** END OF DIVIDEND WAIVER MODEL *****

You can download our dividend waiver template here.


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