An interim dividend may be distributed by the board of directors in the current year on condition that the articles of association (bylaws) empower them to do so.
For an S.A.
Legal provision (Article 72-2 LCC): Interim dividends may be distributed, at any time, under the following conditions:
- A specific clause needs to be foreseen in the articles of association
- Preparation of interim accounts (showing that the reserves available for the distribution are sufficient)
- The decision of the board of directors or executive board, as appropriate, to distribute an interim dividend may not be taken more than two months after the date at which the interim accounts were drawn up
- In their report to the board of directors or executive board, as appropriate, the commissaires or the réviseur d’entreprises agréé (auditors or statutory auditors) shall verify whether the above conditions have been satisfied
Where the interim dividend exceeds the amount of the dividend subsequently approved by the general meeting of shareholders, it shall be considered, in the amount of the excess, as an interim payment on the next dividend.
- The amount to be distributed may not exceed the following:
|Total profits earned (since the end of the last financial year for which annual accounts have been approved)
|+ Any profits carried forward and sums drawn from reserves available (for this purpose)
|- Losses carried forward/any sums to be transferred to reserves (pursuant to the requirements of the law or the articles of association)
For an S.à r.l.
No legal provision (but possible in practice).
Needs to be foreseen in a clause of the articles of association.
Regarding the S.à r.l., interim dividends may also be distributed, at any time, under the following conditions:
- Interim accounts are established by the manager or the board of managers
- These accounts show a profit including profits carried forward or transferred to an extraordinary reserve
- The decision to pay interim dividends is taken by the manager or the board of managers
- The payment is made once the company has obtained the assurance that the rights of the creditors of the company are not threatened and once five percent (5%) of the net profit of the current year has been allocated to the legal reserve