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:
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]