Commonwealth Numbered Acts

CORPORATIONS ACT 1989 No. 109 of 1989 - SECT 201

201. (1) No dividend shall be payable to a shareholder of a company except out
of profits or under section 191.

(2) A director or executive officer of a company who, wilfully pays, or
permits to be paid, except under section 191, a dividend out of what he or she
knows not to be profits:

   (a)  without prejudice to any other liability, contravenes this subsection;
        and

   (b)  is also liable to the company's creditors 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 the creditors, or the
        liquidator suing on behalf of the creditors, may recover the amount
        for which a director or executive officer is liable under this
        subsection.

(3) If the whole amount is recovered from a particular director or executive
officer, he or she may recover contribution against any other person liable
who has directed, or consented to, the payment.

(4) A liability imposed by this section on a person does not, on the person's
death, extend or pass to his or her executors or administrators, nor is his or
her estate liable under this section.

(5) Proceedings may be brought under subsection (2) for the recovery of an
amount even if a person has not been convicted of an offence under that
subsection.

(6) In proceedings under subsection (2) for the recovery of an amount, the
liability of a person under that subsection in respect of the amount may be
established on the balance of probabilities.

(7) In this section:

"dividend" includes a bonus and a payment by way of bonus.