Definition of Dividend:
A distribution to stockholders of cash or property paid by the corporation out of the corporation’s profits. The payment of dividends typically occurs only with the approval of the corporation’s Board of Directors. Dividend payments are subject to double taxation, unless the corporation is an “S Corporation”.
Today’s Question — Friday, July 30
Must I pay all of my employees?
It is not unusual for start-up companies to have limited cash resources. It is also not unusual for entrepreneurs to entice employees to the company by offering stock compensation, instead of cash, until such time as the business can afford to pay regular salaries. However, it is advisable to consult with an employment lawyer in your state of operations to determine if this is permissible under the state’s wage statutes. In most cases, the lawyer will likely advise that each employee be paid an amount equal to applicable minimum wage amounts.
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