Cash dividends property dividends liquidating dividends and stock dividends
Source of stock dividend could be unissued shares of stock of the corporation requiring an application for exemptions from the Securities Regulation Code (SRC Exemption under SRC Rule 10.1) or from the increase of capitalization in the Philippines requiring an SEC approval on the increase of authorized capital stock.Liquidating dividend in the Philippines is distributed during the dissolution and liquidation of a domestic corporation in the Philippines.In a corporate set-up, dividend in the Philippines represents the share of the owners of the corporation – the stockholders.An effective dividend policy in the Philippines would be a coordination of corporate earnings and cash position.
In effect, the stockholder will own more shares after the stock dividend declaration in the Philippines but its percentage of ownership or equity in such corporation may not increase.SEC requirements for such implementation would require technical knowledge and we suggest that you secure assistance of professionals.Tax on dividends in the Philippines would likewise vary depending upon the tax status of the stockholder and the type of dividend in the Philippines declared by the Board of Directors.For regulatory purposes, the SEC requires submission of such dividend declaration for further processing and would require certain documentary requirements as follows: Under this property dividend declaration in the Philippines, the stockholder will receive assets of the corporation, other than cash.It could investment securities of such corporation in the form of shares of stock of other corporations.
The dividends are assigned to the shareholders on the date of record. But for distributing cash dividend, the company needs to have positive retained earnings and enough cash for the payment of dividends. Bonus shares are issued by the company when they have low operating cash, but still want to keep the investors happy.