Can directors get into trouble paying a dividend?

Yes, in two circumstances the directors may become personally liable to compensate the company for the amount of the dividend paid.

It is an offence under section 254T to pay a dividend except out of profits. The claim arises when dividends are paid and the company has not earned sufficient profits to support the dividend.

The second is where dividends are paid while the company is insolvent. This could result in an insolvent trading claim being made against the directors. This claim will only be possible if the company is wound up after the payment of the dividend.