THE CORPORATIONS LAW

CHAPTER 2H - SHARES

PART 2H.5 - DIVIDENDS

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.