In Nigeria, corporate law and practice are still evolving. Consequently, there is scant literature on some major aspects of corporate law. The focus of this study is on one such area covering dividends and other forms of corporate distribution. In addition to the lack of constructive legal literature on company dividends and other forms of corporate distribution in Nigeria, most of Nigeria's corporate participants and policymakers are still largely uninformed of the fundamental rules and principles on company dividends. Motivated by the foregoing, this research critically examines the theoretical rationale and extant legal principles on company dividends. Its main objectives are to close the gap in the literature and to provoke scholarly discourse that may further enrich policy reform measures in the area of company dividends in Nigeria.