Dividends and distributions

What is a distribution?

Distribution is given a very wide definition for the purpose of CA 2006, Pt 23 (CA 2006, ss 829–853).

A distribution is every description of distribution of a company’s assets to its members, whether in cash or otherwise, except:

1. •

   an issue of bonus shares (whether fully paid or partly paid), and

2. •

   certain:

   1. ◦

      reductions of share capital

   2. ◦

      redemptions of shares

   3. ◦

      share buybacks, and

   4. ◦

      distributions of assets to members on the winding up of a company

A distribution of non-cash assets is often known as a distribution in kind or distribution in specie.

What is a dividend?

A dividend is a type of distribution made by a company to its shareholders.

The ordinary meaning of 'dividend' is a share of profits, whether at a fixed rate