While dividends are the result of a happy process, namely the
profitable operation of one's business, the restrictions and
difficulties associated with dividend payment have always given
grounds for frustration. Particularly troublesome is the treatment
of dividends in the course of corporate acquisitions, as the buyer
and the seller need to elaborate special techniques for sharing the
dividends among themselves.
If operations are profitable, it is a common business
requirement that the owner should be able to regularly withdraw the
profits generated by the company. But this, too, causes
difficulties, as the decision on paying dividends can only be made
once a year, at the time the balance sheet is approved. This can
result in a situation that profits generated early in a year can be
distributed to the shareholders more than a year afterwards (at the
time of the approval of the relevant year's financial
statements), and this can cause liquidity problems for the
