Hi everyone,
Our consultancy company in our second year of operation, and second FY just ended on 31 Aug 2014.
We normally do a predetermined number of hours of work for a client every month, but because of the client's schedule we didn't do any work in July and August, and instead will make up for that missed work in the last four months of 2014.
Our profits for this past FY are lower than normal because of the missed work, but we'd still like to pay dividends on that profit after we make it over the last four months of the year.
We'll hold our next AGM in Jan 2015 (as our last one was Jan 2014).
So, what's the least painful way to pay dividends with profits that will be made during Sept-Dec 2014, but are not on the books for the FY ending on 31 Aug 2014?
We will be financially solvent even after paying the dividends from the extra profits.
I can think of a few options, but would like to hear your opinions:
1. I read here:
http://forum.singaporeexpats.com/ftopic95607.html
that you can declare a dividend without holding an AGM/EGM if your articles specify so. I looked at ours and I don't think we can do that. I was actually interested to know (for curiosity's sake since it doesn't look to be applicable to us) if that is in fact true. Seems a bit dodgy but I suppose it's the director's responsibilities to ensure that the proposed dividend is appropriate.
2. We can update our accounts to 31 Dec 2014 just before the AGM and present those at the AGM, and declare dividends based on the updated accounts. That means that the accounts presented at the AGM will not be the same as the ones filed with ACRA at FY end. My accountant says that we cannot do this without also changing our FY end to 31 Dec 2014, which is not something we'd like to do. Is my accountant correct?
3. Hold an EGM after the AGM with updated accounts that reflect the Sept-Dec 2014 profits, and declare dividends during the EGM. I think this will likely work, but also requires the most work.
Any input would be appreciated.
Cheers,
Shadowhawk