Subject: The Dividend Distribution Restrictions Extended Until The End of The Year.
The Dividend Distribution Restrictions period has been extended by 3 months until the end of 2020 through the Presential Decree No: 2948, which promulgated Offical Gazette, dated 18 September 2020.
As may be remembered, dividend distribution restrictions were regulated in the Law No. 7244 dated 17 April 2020 and would be applied until 30.09.2020.
According to this Decree, unless the exceptions apply (exceptions are stated in the Communiqué dated 17 May 2020), dividend distribution restrictions will be applied until 31 December 2020 and thus;
a) Corporations will be allowed to distribute only %25 of their 2019 profits,
b) Previous year gains and legal reserves cannot be subject to distribution,
c) The General Assembly will be unable to grant authority to the Board of Directors for Advance Dividend Distribution.
If the General Assembly has decided to distribute dividends regarding FY 2019, but the shareholders have not yet been paid or have obtained partial payments, payments related to the portion exceeding 25% (twenty-five percent) of the annual net profit of the year 2019 shall be postponed until 31 December 2020.
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