how does one compute for dividends in a business

[Graecia]

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Nag business ko karon. Pro gamay ra man ako capital. But I dont know how to compute for our dividends. I have 80 percent of the capital. so how do we split the profits?

[websniper]

Dividends or Profit? Which of the two you are talking about? Dividends and Profits are quite different.

[Graecia]

How to share dividends after profit if one stockholder has more investment than the others

[arnz11277]

you don't have an accountant?its actually based on the % of shareholdings.so if you have 80% you should multiply by 80% the amount of dividends to be declared or given away to the shareholders.but their should be a tax implication to that.i mean you have to pay tax for the dividends you received.its 10% of the the amount of dividends.

[MandYX]

bai, i understand your business is not a corporation, right?
simple lang bai, u must have an estimate of your business income for a particular year or month, then from that estimate you can have the idea how much are you going to pay as dividend among the business owners, of course you must also consider your cash flow, you must set aside for your working capital.
Division of profits on the otherhand, is a actually simple. If you do not have any existing agreement with other owners as to the division of profits, the ideal method is to use the average capital for the period as the basis for division (it is advisable to have an aggrement with other partners to avoid possible conflict in the future). If an industrial partner (an investor in your business who also manage in running the business) exist in your business, basically he/she will receive an agreed amount in addition to his/her share.

[ladymione]

Thank goodness I found you guys!

I also have the same dilemma now. Good thing I came across this topic while looking for answers to the same question.

Is it okay if you give sample computation? Given that there are 4 partners, where one owns 50% of the total share and the other half split into 3. How much should each one get?

I would really appreciate it much.

[smurky]

good thing you got good advice from the people above...

im no expert but the way i see it is you just have to do basic division..
it's a matter of ratio.. 50% divided by 3. from that "result" accountants based the necessary tax
deductions they should charge you from that business..

[lairy_fights]

Corporations are taxed 10% for dividends given to shareholders.
Pag partnership, ang partners ang taxan sa ila nadawat nga dividend which is 10% pud.

Sa ako lang nahibal-an ha?

Sales
Less: Cost of goods sold
Gross profit
Less: Expenses
Net income/loss

Of course, pag loss, walay madistribute. Ug dili tanan ana imo income imo jud i-distribute diba? Naa manay plowback- kanang cash flow gamiton to finance your business pa. Normally, naa jud nay kasabutan as to the division of profits and losses. If wala, it's according to capital invested or it is divided equally.

Net income
Less: Plowback
Dividends to be distributed
Less: Share of industrial/managing partner
Total
Less: Preferences
Total
Multiply sa profit and loss sharing
Share of each partner

Prefences kay kanang example, nagstipulate mo nga partner A should recieve 5% of the income before the other partners' share. So, unahon jud na nimo siyag minus. Ayha na dayon mo magtunga2.
Case to case basis pud ni siya. I hoped I helped.

[szichri]

keep it coming... this thread is great...


subscribed!!!!

[sunntonya]

dividendo na bai...meaning, its time to split the profits. after taxes of course. there are different ways to split the ganansya, so to say, especially, if you have partners. but first things first, the business, whosoever handles operations must make it a point to come out with income statements, or results of operations and of course a balance sheet...this is because you may be making profits but no cash is available because it is in the form of assets, be it receivables, or equipments or the like. this is always the lalis point in any business because they do not BEFOREHAND talk about when profits should be distributed and how often it should be distributed. because the business needs working capital, that is, the money needed to buy the materials for sale, profits is normally not distributed 100% to partners, rather, it is agreed upon, depending on the nature of the business whether a certain percentage is set aside for distribution of profits or dividends as some may call it, or whether to plow back everything for expansion purposes. that is why before you get into a business with any of your friends, you clarify if this is the money from which you are SOLELY expecting to earn from or it is some FREE PORTION of your investible funds that you are putting into the business. As participation in business is normally taken from the initial investments made, the % of ownership is determined from that aspect and dividends are also based on the same % of ownership.

murag taas taas na to da, undang lang una ko.