Dividend payments not unlawful despite lack of distributable profits

In the case of Global Corporate Limited v Hale [2017] EWHC 2277 (Ch), the High Court ruled that dividend payments paid to a director-shareholder by a company that entered insolvent liquidation were not unlawful, despite there being a lack of distributable profits. The case will be of particular interest to many small businesses and their advisers for clarifying the point at which payments to a director-shareholder are classed as dividends rather than salary.