The term “nimble dividends” refers to dividends that are paid out of the current earnings of the corporation notwithstanding the fact that the corporation otherwise would not be entitled to pay the dividend.
Nimble dividends is a dividend paid out of a corporation’s current earnings when there is a deficit in the account from which dividends may be paid.
Nimble dividends are permitted in some states, while not in others.
“Alabama law prohibits the payment of so-called ‘nimble dividends’ —dividends which are paid out of current earnings when the corporation shows no cumulative dividends.” Hollingshead v. Burford Equipment Co., 828 F. Supp. 916 (M.D. Ala. 1993).
Puerto Rico’s corporate law, on the other hand, allows for a corporation that had net profits to pay dividends in the absence of surplus. See Law Num. 164-2009 (14 LPRA sec. 3523).