Several transactions involving the company’s capital can only be carried out if the company complies with the solvency test, which must be made by way of a solvency statement. citco (mauritius)limited oct. 2011 - aujourd’hui 9 ans 6 mois Responsible for preparation of financial statements in accordance with International Financial Reporting Standards for a portfolio of client companies and getting the accounts audited and filing of the same to the authorities. The company may recover from a shareholder, dividend which was not properly paid unless the shareholder has received the dividend in good faith and has no knowledge that the company did not satisfy the relevant solvency test. The solvency test is set out in s 4(1) of the Companies Act 1993 (the Act). v. A certified copy of the certificate of solvency test duly signed by the members of its board as required under section 61(3) of the Companies Act 2001. The payment of a dividend is governed by a company's Articles of Association. On the agenda will be the company’s Memorandum of Incorporation (MOI), the Shareholders’ Agreement and finally, the liquidity and solvency test. (sections 131, 132 and … Requirements of the Companies Act and tax effects When considering company distributions, we most often think of cash dividends, being one form of the return on investment for the shareholders. Companies Act 2006 (CA 2006 (s830)) states that 'a company may only make a distribution out of profits available for the purpose'. Unless otherwise stated, this will be in accordance with paragraphs 30-31 of Table A. It can be seen that the solvency test for dividends will impose more onerous demands on directors. This means that the management has to assess their company’s solvency more frequently. Chapter 13, section 2 of the Limited Liability Companies Act provides for a solvency test. Mauritius Highlights 2020 Page 2 of 6 Taxation of dividends – Dividends paid by a Mauritius-resident company are exempt from income tax. An increasing number of listed companies have begun paying out dividends in several instalments. When companies make a profit it is common practice to credit the profit share (or dividend) to their shareholders account each year. In this article we take a look at the consequences of decisions made around private companies paying dividends and the solvency test. Additional Criteria for Declaration of Dividend or other Transfers out of Interim Profits 3.1 Notwithstanding section 1.2, a deposit taking institution may distribute profits based on The solvency statement is a statement made by each director […] Before the board can even discuss the requirements of the Companies Act, the board must determine its authority to declare a dividend. Foreign dividends are taxable, but a credit may be claimed for underlying tax and withholding tax. The Companies Act 2016 introduces the solvency statement (Section 113) and the solvency test (Section 112). 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