{"id":218,"date":"2016-01-19T11:29:12","date_gmt":"2016-01-19T08:29:12","guid":{"rendered":"http:\/\/denizeray.com\/?p=218"},"modified":"2023-06-06T15:42:52","modified_gmt":"2023-06-06T12:42:52","slug":"distribution-of-advance-dividens-in-joint-stock-companies-and-limited-companies","status":"publish","type":"post","link":"https:\/\/harveyarasan.com\/en\/distribution-of-advance-dividens-in-joint-stock-companies-and-limited-companies\/","title":{"rendered":"Distribution of Advance  Dividend In Joint Stock  and Limited Companies"},"content":{"rendered":"<p style=\"text-align: justify;\">The main purpose of commercial companies is to generate profit and distribute such profit, named as dividend, to the shareholders on certain dates. According to Article 509-(2) of the Turkish Commercial Code (\u201c<strong>TCC<\/strong>\u201d), dividends may be distributed only out of the net profit for the period and voluntary reserves. However, the Communiqu<strong>\u00e9<\/strong> on the Distribution of Advance Dividends, published in the Official Gazette dated 9 August 2012 (\u201c<strong>Communiqu\u00e9<\/strong>\u201d), joint stock companies and limited companies, which are not subject to the Capital Market Law are allowed to distribute advance dividends.<\/p>\n<p style=\"text-align: justify;\">According to the Communiqu\u00e9, if the company made profit based on the interim financial tables (quarter, half or nine month) within the relevant accounting period, the general assembly of the company may distribute advance dividends. Distribution of advance dividend may have the following consequences depending on whether the company will generate profit at the end of the said accounting period:<\/p>\n<p style=\"text-align: justify;\"><strong>&nbsp;<\/strong><strong>In case the net profit does not cover the advance dividend<\/strong>; part of the advance dividends, which exceeds the net profit for the period, shall be deducted from the free reserve funds of the previous year\u2019s balance sheet, if any. If the free reserves funds are not sufficient to cover the distributed advance dividends, the shareholders shall return the advance dividends in excess to the company.<\/p>\n<p style=\"text-align: justify;\"><strong>&nbsp;<\/strong><strong>In case of loss;<\/strong> general legal reserve funds and the free reserve funds of the previous year\u2019s balance sheet shall be first used to cover the loss. If the reserve funds are not sufficient to cover the loss, shareholder must return the advance dividends distributed within that period to the company.<\/p>\n<p style=\"text-align: justify;\">Calculation method of the advance dividend is also regulated under the Communiqu\u00e9. Accordingly, advance dividend is calculated by subtracting the totality of the past years\u2019 loss, tax, fund and financial reserves, reserve funds, and if any, amounts to be set aside for shareholders having privileges, owners of redeemed shares and other persons participating to the profit, from the interim period profit. Advance dividend shall not exceed half of such amount.<\/p>\n<p style=\"text-align: justify;\">Privileged shares are not taken into consideration when the advance dividend is paid. In case that the shareholders have debts to the company other than share capital subscription debts, such debts must be deducted from the advance dividend to be paid to the shareholder.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The main purpose of commercial companies is to generate profit and distribute such profit, named as dividend, to the shareholders on certain dates. According to Article 509-(2) of the Turkish Commercial Code (\u201cTCC\u201d), dividends may be distributed only out of the net profit for the period and voluntary reserves. However, the Communiqu\u00e9 on the Distribution [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":3347,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[2,140,175,138,131],"tags":[],"class_list":["post-218","post","type-post","status-publish","format-standard","has-post-thumbnail","category-default","category-capital-markets-and-corporate-governance","category-corporate-and-commercial-law","category-corporate-commercial-law","category-startups-and-smes","entry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.8 (Yoast SEO v23.8) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Distribution of Advance Dividend In Joint Stock and Limited Companies -<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/harveyarasan.com\/en\/distribution-of-advance-dividens-in-joint-stock-companies-and-limited-companies\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Distribution of Advance Dividend In Joint Stock and Limited Companies\" \/>\n<meta property=\"og:description\" content=\"The main purpose of commercial companies is to generate profit and distribute such profit, named as dividend, to the shareholders on certain dates. According to Article 509-(2) of the Turkish Commercial Code (\u201cTCC\u201d), dividends may be distributed only out of the net profit for the period and voluntary reserves. 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