How to Properly Distribute Profit from a Limited Liability Company in 2025

You've Made a Profit. What Now? Basic Strategies and Why the Right Procedure is Key

The main advantage of a limited liability company is precisely that "limited liability." As a shareholder, you are not liable for the company's debts with your personal assets, but only up to the amount of your unpaid contribution. However, this protection is not unconditional. It comes at the cost of a strict separation of the company's assets from your personal assets.

The money in the company's bank account, even if you are the sole owner, does not belong to you, but to the company as a separate legal entity. In this area, ARROWS provides comprehensive tax advisory services to help you set up your relationship with the company correctly. Any informal withdrawal of money, for example, by a simple transfer to a personal account, is not only a tax offense but, above all, an unauthorized interference with the company's assets, which can have fatal legal and financial consequences.

• Always based on proper financial statements approved by the General Meeting.

• Always after a formal decision by the General Meeting on the distribution of profit.

• Always after careful execution and ideally written documentation of all statutory tests (balance sheet, insolvency) by the executive director.

• Always after checking that all recipients (and their beneficial owners) are properly registered in the Register of Beneficial Owners.

• Always with the correct and timely withholding and payment of the 15% withholding tax.

• Always with the financial statements published in the Collection of Deeds.

When is it high time to call a lawyer?

If you answer "yes" to any of the following questions, it is appropriate to consider a professional consultation:

• Are you planning to pay out profits for the first time and are unsure of the procedure?

• Is your company's financial situation tight, or do you have doubts about its liquidity?

• Do you have a more complex ownership structure (multiple shareholders, foreign owners)?

• Are you not 100% sure about any step in the process or the interpretation of the law?

• Are you considering a combination of different remuneration methods (dividend, executive director's remuneration, loan)?

How can we at ARROWS specifically help you?

Our experts are ready to provide you with comprehensive support throughout the entire process:

• Preparation of complete documentation for convening and holding the General Meeting.

• Assistance to the executive director in conducting and documenting the statutory tests to protect their personal assets.

• Review and setup of contracts on the performance of the executive director's duties to be tax and legally optimal.

• Tax optimization in cooperation with our tax advisors to find the most advantageous solution.

• Resolution of disputes between shareholders regarding the distribution of profit.

• Representation before authorities in case of an inspection by the tax office or the Registry Court.

Your business is the result of your hard work. Don't risk your assets and peace of mind over a formal error or ignorance of complex rules. Take the first step towards the safe and effective management of your company. Arrange a no-obligation consultation with our experts at ARROWS today.