Commonwealth Consolidated Acts

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CORPORATIONS ACT 2001 - SECT 254V

When does the company incur a debt?

             (1)  A company does not incur a debt merely by fixing the amount or time for payment of a dividend. The debt arises only when the time fixed for payment arrives and the decision to pay the dividend may be revoked at any time before then.

             (2)  However, if the company has a constitution and it provides for the declaration of dividends, the company incurs a debt when the dividend is declared.



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