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The court interprets the term “surplus” in order to test the profit in the distribution of dividend
August 2019
Want to distribute a dividend? This next legal update is exactly for you! In a precedential decision delivered in July, the Tel-Aviv District Court (Economics dept.) has interpreted key terms of the Companies Act which relate to distribution of dividends and ordered that a dividend can be distributed only from the “net profit” of the company, and not from other capital reserves. For further reading about this decision, read the full legal update here.
