ABSTRACT
The law relating to the payment of dividends by companies is a vast and complex subject. To bring the discussion within manageable proportions, this paper concentrates on the development of the general 1 law of England 2 which has greatly influenced the course of events in countries that have tended to follow the English pattern. It can be broadly described as being an example of judicial law-making upon which was superimposed an exercise of judicial law reform. What makes it somewhat difficult to follow is that the original construction was based upon inadequate statutory provisions, and the process of reform has been hampered by the rules of binding precedent. Consequently a thorough consideration of what policy should underly dividend law, and hence the prescription of a coherent body of rules, was not possible. The present state of the law can only be understood by following its evolution.
