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Companies and Allied Matters Act 2020 · Part B · Chapter 16

Section 433 Liability for paying dividend out of capital

(1)
All directors who knowingly pay, or are party to the payment of dividend out of capital or in contravention of this Part, are personally liable jointly and severally to refund to the company any amount so paid.
(2)
Such directors shall have the right to recover the dividend from shareholders who receive it with knowledge that the company had no power to pay it.
Cite as: Companies and Allied Matters Act 2020, section 433

What this section means

From the guide: Dividends under CAMA 2020: declaring, distributable profits and unclaimed dividends

  • Directors who knowingly pay a dividend out of capital are personally liable to refund it (section 433).
  • They can recover it from shareholders who received it knowing the company had no power to pay (section 433).

Read the whole subject

Source: Companies and Allied Matters Act 2020 (Act No. 3 of 2020), Official Gazette No. 124, Lagos, 10 August 2020. General information, not legal advice.