CCH Note:
Part 13 of the
Corporations Act 1989, inserted
by sec 6 of No 110 of 1990, Sch 1 (effective 1 January 1991), begins as
follows:
PART 13 - THE CORPORATIONS LAW
THE CORPORATIONS LAW
82
The Corporations Law is as follows:...
CHAPTER 2H - SHARES
History
Chapter 2H inserted by No 61 of 1998, Sch 1 (effective 1
July 1998).
PART 2H.5 - DIVIDENDS
History
Part 2H.5 inserted by No 61 of 1998, Sch 1 (effective 1
July 1998).
SECTION 254V
WHEN DOES THE COMPANY INCUR A DEBT?
254V(1)
[Fixing amount or time]
A company does not incur a debt merely by fixing the amount or time for payment of a dividend. The debt arises only when the time fixed for payment arrives and the decision to pay the dividend may be revoked at any time before then.
254V(2)
[Declaration of dividend]
However, if the company has a constitution and it provides for the declaration of dividends, the company incurs a debt when the dividend is declared.
History
S 254V inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).