a new company is in its first year.
6 months in directors pay a reasonable size dividend which is legal.
almost immediately, lose a contract and run at a loss.
directors provide loans to keep the company going and the interim dividend is bigger than the profit for the year.
Q. Is the dividend legal ? and,
If the comapny is would up after the first year, would the dividends need to be repaid ? (assuming the shareholders are not just the directors)?