Distribution of profit and other capital in commercial capital company

Distribution of profit and other capital in commercial capital company Abstract The right to receive dividends is one of the fundamental rights of each shareholder of a capital company. Even though it stems from the very nature of a capital company that its shareholders will often wish to exercise solely their right to receive dividends, and not their right to participate in the management of the company, it is obvious that even capital companies may be established for purposes other than that of achieving profit alone. At the same time, companies, which were established solely for the purpose of achieving profit may wish to postpone the realization of profit for various reasons. Therefore, it is important for the law to be flexible enough to accommodate these needs while still providing adequate protection to creditors and minority shareholders of the company. Generally speaking, the Czech legal regulations governing the distribution of profit and other capital strike the balance between these competing interests fairly well. On the other hand, the rules contained in the Business Corporations Act are surrounded by a number of interpretational problems and uncertainties, e.g. because the applicability of the Czech Supreme Court jurisprudence issued in relation to the former Commercial Code has been called..