the objective of division 7a is to reflect the reality of a situation, rather than the formality. as a matter of form, a dividend paid by a company is one that is declared by the directors of the company and either paid to the shareholders or credited to the shareholders account with the company. however, where a company pays amounts to or for shareholders, not expecting the amounts to be repaid, without formally declaring a dividend, the reality is that the advances are analogous to a dividend. this is the situation that division 7a seeks to catch.