Abstract

The newly introduced provisions on the return of a dividend advance in a limited liability company (i.e. Art. 195 § 11 of the Commercial Companies Code) regulate the terms and conditions under which the shareholders of a limited liability company shall return the dividend advance they have received. Unfortunately, due to the fact that the obligation to return the dividend advance is linked exclusively with the net financial result (that is without any reference to other liabilities shown in the balance sheet which may constitute a source for financing the amount of the dividend payable to the shareholders), the aforementioned regulation will cause a lot of interpretational problems. The article is meant to provide interpretational solutions which would allow linking the obligation to return the dividend advance with all sources of financing the dividend rather than with the net financial result only.