How does this work with the appropriation of profits?

The appropriation of profits of an AG follows a certain pattern:

1. Allocation to the legal reserves: 5% of the annual profit must be paid into the legal reserves until these have reached 50% of the paid-up share capital.
2. Dividend distribution to shareholders: After the allocation to the legal reserves, part of the profit can be distributed to shareholders as a dividend. The amount of the dividend is decided by the Annual General Meeting and voted on by the shareholders based on a proposal by the Board of Directors.
3. Voluntary reserves: The company may create additional voluntary reserves to ensure financial stability or for future investments.
4. Retention of profits: A portion of profits may be retained in the company to strengthen equity or finance future projects.