shareholders dividend

retired_taustin · 11-17-2007, 07:06 PM

Quote:

Originally posted by Nostromo:
<BLOCKQUOTE>Originally posted by Law_Man:
For what it's worth the English company law position is as follows:

Both Private Companies and Listed Companies can pay dividends in any or all years where there are sufficient distributable profits.

The mechanism for doing so is that the board get together and declare an appropriate dividend which then must be approved by the shareholders by an ordinary resolution at a general meeting.

The dividend is only then paid after the final accounts for the year to which it relates are completed and so dividends paid will be a year behind.

Dividends can only be paid if there are 'profits available' which means only if profits that have been kept within the company (i.e not distributed through dividends') exceed the total amount of debts fallen due to date.

Private Companies are less likely to declare a dividend than public companies because often there are only one or two shareholders who will also be directors too and so they can instead pay themselves an agreed salary as a wage to live on and plough most of the profits back into the company to try to grow it. Most owners of private companies therefore are aiming to increase the size of the company to a point at which it's value is sufficient for them to sell it for good money on exit.

Public Companies are much more likely to pay regular dividends and in fact most investors (shareholders) in public companies would expect a dividend to be paid.

Re Chelsea well if the Company (whatever it's called e.g. Chelsea Ltd etc) made a loss the last few years then it can't pay a dividend as there would be no profits. If in the year in question that Nostromo referred to in the opening post Chelsea made a profit, then Chelsea can decide to pay a dividend to it's shareholder(s) i.e. Abramovich.

In terms of business strategy, I'm sure Abramovich intends to get his £400m back at some stage, and this is reflected in the appointment of Kenyon with a 5 year strategy to break even. Soon after the team breaks even, and when all the investment in youth and facilities etc at Chelsea comes on stream, then the Company will be in a position to start to pay a dividend to Abramovich. Moreover, if anyone ever wants to buy Chelsea then Abramovich might get the remainder of his money back there too. That's how businesses work. Investors invest to receive dividends and in the hope that their holding will increase in value.

made a loss. started with 110 m, finished the season with 52m...then paid out divs on that. </BLOCKQUOTE>

It says that dividends are paid "after the final accounts for the year to which it relates are completed and so dividends paid will be a year behind."

You made a loss, but if dividends were paid, it is likely that there was a profit made in the previous year.

Fitness Matt · 11-17-2007, 09:52 PM

Quote:

Originally posted by Nostromo:
<BLOCKQUOTE>Originally posted by Glyn:
<BLOCKQUOTE>Originally posted by DS:
Any company can pay dividends. If 1 person owns the company they can take out as much money as they want from the company because its there company.

Exactly. Abramovich owns Chelsea because he owns the shares in Chelsea. Therefore, he's a shareholder that dividends are paid to.

And for Nostromo - as for only plcs paying dividends...how exactly are the investors in non-plcs supposed to get a return on their investment if not through dividend payments? </BLOCKQUOTE>

isn't the role of the moderator is to moderate? i don't recall 'attitude' being part of the jd. but thanks for the feedback anyway.

but since you made such an intelligent point, why didnt watford pay shareholders dividend...or man city?

please dream up something on that and share it with us

thanks in advance </BLOCKQUOTE>

Attitude? Where did you dream that up from? Do you actually read a straightforward question (which you haven't bothered to answer, btw) in your own head with the type of attitude you would ask it (ie the same sort of attitude that comes out with 'but since you made such an intelligent point')?

As for 'why didnt watford pay shareholders dividend...or man city?', for a start, I don't know whether you're talking about in-game or IRL, but in either case, as has been pointed out above, but even if a company has made the profits to enable them to make a profit, it doesn't mean that they have to make dividend payments - profit can always be ploughed back into a company for invest purposes etc. And that isn't 'dreamt up', but I have shared it with you.

As for 'isn't the role of the moderator is to moderate?'. Yes it is. But it doesn't mean that I can't also post in the same way as any other forum user.

In return, perhaps I can ask a similar question of you - isn't it the role of forum users to adhere to the House Rules and also the Terms And Conditions you agreed to when joining the forums that state you shouldn't be abusive to other users? Please dream up something on that and share it with us.

Thanks in advance.

retired_samiam · 11-17-2007, 10:27 PM

I could make the suggestion that posting in a imitating way is purposely making a mockery of Nostromo and was said in a sarcastic way and will only have one outcome, which is to encourage an inflammatory response from him, which as a moderator, is your job to discourage and prevent.

I have no problem with you posting normally and arguing a point, but perhaps as someone with a position of seniority on this forum, you should think about your posts and think "Other posters might be assholes, how would they react to this post of mine", and if there is a possibility for a negative response, you should alter your post accordingly.

I appreciate some posters will react negatively to any post you make, but your sarcastic post has a higher likliehood of prompting a bad reaction than "normal" posts would have.

Anyway, it's not my place to advise you.

On topic, Chelsea are privately owned and as such, can choose whether to take out dividend payouts, whether a loss or profit is made. The game refers to them as "shareholders" but in reality this means the private individual. For whatever reason, he has decided to withdraw £18m from the club's bank account for his own personal use.

Dividend payouts are decided on an annual basis so some clubs will pay out and some won't. The amount may change year on year as well.

It's not your place as manager to worry about it. If your club is put in financial difficulties as a result of a divident payout, further money will be invested into the club at a later date.

Fitness Matt · 11-17-2007, 10:49 PM

Quote:

Originally posted by DamianY2J:
I could make the suggestion that posting in a imitating way is purposely making a mockery of Nostromo

It was not to mock him but to attempt to show how it feels to be on the receiving end of comments like that.

Fitness Matt · 11-17-2007, 10:55 PM

Quote:

Originally posted by DamianY2J:
On topic, Chelsea are privately owned and as such, can choose whether to take out dividend payouts, whether a loss or profit is made. The game refers to them as "shareholders" but in reality this means the private individual.

Sorry, but that's wrong. Chelsea are a private company, and as such are still owned by whoever owns shares in them, whether that's one person or several.

I'm not certain what you mean about deciding whether a profit or loss is made either, as that is something that is decided by the amount odf money coming in and going out, not by the whim of the owners - that would be a form of cooking the books and most likely be illegal as exaggerating loss would evade Corporation Tax and exaggerating profit would falsely inflate the value of the shares.

retired_samiam · 11-17-2007, 10:56 PM

Quote:

Originally posted by Glyn:
<BLOCKQUOTE>Originally posted by DamianY2J:
I could make the suggestion that posting in a imitating way is purposely making a mockery of Nostromo

It was not to mock him but to attempt to show how it feels to be on the receiving end of comments like that. </BLOCKQUOTE>
Perhaps continuing the argument or giving him an excuse to continue it isn't a moderators job. Anyway, that's just my opinion.

Fitness Matt · 11-17-2007, 10:59 PM

Quote:

Originally posted by DamianY2J:
<BLOCKQUOTE>Originally posted by Glyn:
<BLOCKQUOTE>Originally posted by DamianY2J:
I could make the suggestion that posting in a imitating way is purposely making a mockery of Nostromo

It was not to mock him but to attempt to show how it feels to be on the receiving end of comments like that. </BLOCKQUOTE>
Perhaps continuing the argument or giving him an excuse to continue it isn't a moderators job. Anyway, that's just my opinion. </BLOCKQUOTE>

Perhaps not, but having looked at his posts throughout the forum, I'm interested in finding out what he thinks is acceptable because as far as I am concerned, he is a person in a glass house throwing stones. The alternative is to get heavy on him straightaway, which is just going to look like a petty reaction from me.

retired_samiam · 11-17-2007, 11:03 PM

Quote:

Originally posted by Glyn:
<BLOCKQUOTE>Originally posted by DamianY2J:
On topic, Chelsea are privately owned and as such, can choose whether to take out dividend payouts, whether a loss or profit is made. The game refers to them as "shareholders" but in reality this means the private individual.

Sorry, but that's wrong. Chelsea are a private company, and as such are still owned by whoever owns shares in them, whether that's one person or several.

I'm not certain what you mean about deciding whether a profit or loss is made either, as that is something that is decided by the amount odf money coming in and going out, not by the whim of the owners - that would be a form of cooking the books and most likely be illegal as exaggerating loss would evade Corporation Tax and exaggerating profit would falsely inflate the value of the shares. </BLOCKQUOTE>

My sentence reads "they can decide to take out a dividend, whether a profit is made or a loss is made".

For example, if Chelsea have £50m in the bank, and one year, they make a loss of £7m, the private owner, or owners of the company who owns it can decide to take out a dividend of the remaining £43m. So, a dividend could be paid out even if a loss that year is made. It's at the discretion of the private owner or company.

Fitness Matt · 11-17-2007, 11:27 PM

Quote:

Originally posted by DamianY2J:
My sentence reads "they can decide to take out a dividend, whether a profit is made or a loss is made".

For example, if Chelsea have £50m in the bank, and one year, they make a loss of £7m, the private owner, or owners of the company who owns it can decide to take out a dividend of the remaining £43m. So, a dividend could be paid out even if a loss that year is made. It's at the discretion of the private owner or company.

Ah, I see what your sentence meant now, the comma made me read it with the emphasis slightly differently.

Yes, they have the control over the club to enable them to make the decision to take cash out of the club (if it is available to be taken out). However, it can only be a dividend from profits if there are profits made to pay a dividend from.

Money can be taken out of a company when profits haven't been made, but it isn't a dividend, it's a repayment of Capital Investment, and is different because it represents a book credit on the Capital Ledger and therefore has a knock-on effect on the book value of the company as it is in effect a shareholder selling their shares back to the company. A dividend is a straight payout to the shareholder without it affecting their shareholding.

retired_samiam · 11-17-2007, 11:36 PM

I would suspect that the game would refer to any payout to shareholders or the owner as a dividend. It would be too complex to refer to it as anything else - it's not the right intention to confuse people with finances.

shareholders dividend

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shareholders dividend