ACT 125

COMPANIES ACT 1965 (REVISED - 1973)

PART XII - GENERAL

DIVISION 2 - OFFENCES

Section 365. Dividends payable from profits only.

(1) No dividend shall be payable to the shareholders of any company except out of profits or pursuant to section 60. (1A)-(1D) (Deleted by Act A1081). (2) Every director or manager of a company who wilfully pays or permits to be paid any dividend out of what he knows is not profits except pursuant to section 60— (a) shall without prejudice to any other liability be guilty of an offence against this Act; and (b) shall also be liable to the creditors of the company for the amount of the debts due by the company to them respectively to the extent by which the dividends so paid have exceeded the profits and that amount may be recovered by the creditors or the liquidator suing on behalf of the creditors. Penalty: Imprisonment for ten years or two hundred and fifty thousand ringgit or both. (3) If the whole amount is recovered from one director or from the manager he may recover contribution against any other person liable who has directed or consented to the payment. (4) No liability by this section imposed on any person shall on the death of the person extend or pass to his executors or administrators nor shall the estate of any such person after his decease be made liable under this section. (5) In this section "dividend" includes bonus and payment by way of bonus.