Dividends......

[BootCamp]

hypothetical time.

If a company makes £60,000 a year, or in a year, whatever, and has 3 shareholders, of equal standing.

How are dividends decided?

Or is this something that should be laid out at the inception of the company?

EXAMPLE: 40% of profit to be retained as cash flow, 30% as immediate re investment, and 30% paid out in dividends?

Is that how it should work, and where should this be laid out?

[Maslins]

The directors should discuss this, don't think you'd normally have anything set in stone as to how much is paid out vs reinvested.

Which of the three shareholders gets what share of dividends will depend on their % ownership.

[KM-Tiger]

Which of the three shareholders gets what share of dividends will depend on their % ownership.

And the class of shares they own.

As you say, I've always understood how much to pay is a board decision.

[BootCamp]

cheers, I didnt think it would be all profits to be paid as dividends, it would make sense that the board decides upon a figure