A reasonable time period for paying a dividend is two weeks.
No, there are no timing restrictions on paying dividends.
Annual or ordinary dividends are those paid out of the profits of the fiscal year or against freely distributable reserves of the company as reflected in the statutory annual accounts approved by the Shareholder(s).
It is also possible to distribute current year profits through interim dividends provided the relevant solvency test is satisfied and management accounts prepared (see below).
Annual / Ordinary dividends must be based on the latest adopted annual accounts. Annual accounts are generally subject to audit unless the company is exempt.
Interim dividends require unaudited management accounts showing that the company has enough liquidity (cash) for the distribution. These management accounts will be included in the report to the statutory annual accounts to be approved by the Shareholder(s) at a later stage.
For annual / ordinary dividends, there must be sufficient unrestricted equity according to the latest adopted annual accounts, and also taking into account any value transfers after the balance date. The amount must also be otherwise justifiable taking into account e.g., the company's capital and liquidity needs and the "prudence principle".
For interim dividends, the following solvency test must be satisfied:
(i) interim dividends cannot be distributed if the net equity of the company is lower than the share capital amount, or if it falls below such amount as a result of the dividend distribution; and
(ii) the amount to be distributed as a dividend cannot exceed the total profits obtained since the end of the last fiscal year, after having deducted accumulated losses and mandatory reserves (established by law or by the corporate by-laws), and the estimated tax payable on such result.
Yes, it may be possible to increase reserves by reduction of the share capital or other restricted equity.
No regulatory approvals are required in connection with payment of a dividend.
No, there are no foreign exchange requirements on paying dividends to foreign parent companies.
Yes, there are no restrictions from a corporate law perspective on borrowing cash to settle a dividend.
Yes. An auditor statement should be obtained to support the board's assessment that the dividend is justifiable. This requirement may be waived with all shareholders' consent, but is generally recommended in order to protect the board from liability. The statement can generally be obtained within 2-3 days provided the auditor has been briefed in advance.
Yes, there are certain restrictions from a corporate law perspective on lending funds intra-group but cross-border. Under the financial assistance rules of the Swedish Companies Act, a Swedish AB may not provide monetary loans, or security for monetary loans, to (among others) a person or legal entity holding shares in the company or in a company in the same company group, unless an exemption applies. For purposes of this general loan prohibition, a company group is defined as a group of companies in which the parent company is a Swedish AB. There are exemptions, for example for loans within a group where the parent company is domiciled in the EEA and comparable to a Swedish limited liability company and its subsidiaries, and for certain commercially motivated loans.