A company has an implied power to distribute its Profits to its members, unless its Articles of association provide otherwise.
’Distribution’ is given a very wide definition for the purpose of Part 23 of the Companies Act 2006 (ss 829–853) (CA 2006).
A distribution is every description of distribution of a company’s assets to its members, whether in cash or otherwise, except:
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an issue of bonus Shares (whether fully-paid or partly-paid), and
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certain:
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reductions of Share Capital
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redemptions of shares
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share buybacks, and
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distributions of assets to members on the winding up of a company
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For a detailed discussion of what a distribution is, see Practice Note: Distributions.
A dividend is one type of distribution that may be made by a company to its members.
The ordinary meaning of 'dividend' is a share of profits, whether at a fixed rate or otherwise, allocated to the holders of shares in a company. It is used in relation to payments made to shareholders as shareholders and not, eg, by way of
