How profits are distributed in a limited company?

In a limited company, profits are typically distributed among shareholders in the form of dividends, which are paid based on the number of shares they own. The company’s board of directors decides the amount and timing of dividend payments, taking into account the company’s financial health and future investment needs. Additionally, profits can be retained within the company for reinvestment or to strengthen its balance sheet. Any remaining profit after dividends is often reinvested into the business or held as retained earnings.