Corporations Amendment (Corporate Reporting Reform) Act 2010 (66 of 2010)

Schedule 1   Amendments relating to the Corporations Act 2001

Part 1   Main amendments

Corporations Act 2001

5   Paragraph 9.1 of the small business guide in Part 1.5

Repeal the paragraph, substitute:

9.1 Dividends

Dividends are payments to shareholders. They can only be paid if:

• the company's assets are sufficiently in excess of its liabilities immediately before the dividend is declared; and

• the payment of the dividend is fair and reasonable to the company's shareholders as a whole and does not materially prejudice the company's ability to pay its creditors.

It is a replaceable rule (see 1.6) that the directors decide whether the company should pay a dividend.

[sections 254T, 254U]