Dividends in a limited company (aktiebolag, AB)

A dividend is the part of the company's unrestricted equity that the general meeting decides to pay out to the shareholders. The decision is normally made at the annual general meeting on the basis of the adopted annual report, but an extra dividend can be decided at an extraordinary general meeting.

The dividend may never exceed the unrestricted equity, and the board must judge that it is justifiable with regard to the company's need for capital and liquidity. The company pays corporate tax on the profit before it can be distributed, and the owner then pays tax on the dividend.

For owners of close companies (fåmansbolag), the 3:12 rules determine how much is taxed as capital income. Planning salary and dividends correctly over the year is one of the most common advisory questions we receive, and it is included in our Premium package.