Direct Debit Dividend Contributions also known as 3DC are payments made towards
shareholders for
shares
In financial markets, a share is a unit of equity ownership in the capital stock of a corporation, and can refer to units of mutual funds, limited partnerships, and real estate investment trusts. Share capital refers to all of the shares of an ...
which have been issued on credit.
Issuing stock on credit is considered appropriate when a
Stakeholder
Stakeholder may refer to:
*Stakeholder (corporate), a group, corporate, organization, member, or system that affects or can be affected by an organization's actions
*Project stakeholder, a person, group, or organization with an interest in a proje ...
(such as company's founder or other key person) wishes to retain involvement in a business but is unable to raise the capital required to pay for stock. In such circumstances the company's shareholders may agree to issue the desired level of stock against a plan where shares must be paid for through direct debit dividend contributions. 3DC differs from
Stock options in that the recipient is awarded shareholder status from the moment the 3DC arrangement is agreed.
3DC is often regarded as a reward for efforts achieved (usually for the groundwork required in setting up a new business). It also serves as an incentive to ensure future performance of the company's stock.
See also
*
Direct debit
*
Authorised capital
The authorised capital of a company sometimes referred to as the authorised share capital, registered capital or nominal capital, particularly in the United States) is the maximum amount of share capital that the company is authorised by its con ...
*
Share capital
A corporation's share capital, commonly referred to as capital stock in the United States, is the portion of a corporation's equity that has been derived by the issue of shares in the corporation to a shareholder, usually for cash. "Share capita ...
External links
Detailed break downfrom
Companies House
Corporate law
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