From my bit of knowledge, companies could suddenly not make any...

  1. 2,950 Posts.
    lightbulb Created with Sketch. 21
    From my bit of knowledge, companies could suddenly not make any profit for a number of years and deny the govt. revenue. Yet, this doesn’t preclude them from paying an unfranked dividends.

    This practice was common behaviour in the past and many companies were contributing the minimum tax.
    The franking credit concept was simply a bait or enticement for companies to pay more tax!

    Shareholders will still be able to pay their tax obligations from these unfranked dividends - many financial commenters claim that these dividends are generally higher than franked dividends.

    If company’s were considerate to their shareholders, theoretically they should disburse all the franking credits and keep the credit ledger to a minimum.

    Radicool Views
 
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.