As a record label owner net income after taxes is the residual amount of money that your record company will be left with after all the expenses have been deducted from sales.
Generally speaking you have two options you can choose from as to how you want to handle your record label’s net income:
- The first option is to pay cash dividends to the shareholders or to yourself as the owner of the record company.
- The second option is to reinvest the net income after taxes as returned earnings.
However, if you are just getting started when running your record company it may be in your best interest not to pay cash dividends earlier on, because cash dividends can hinder the progress of long-term growth of your record label.
So instead of paying cash dividends you can then take that money and expand the operations of your record label towards the goal of it being a multi-national corporation.
Nevertheless, sometimes you may need to cash dividends for a major upcoming expense in your daily life and in that sense perhaps you can proceed to declare a cash dividend to honor your personal obligations.