Dividend on shares

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 April 2012 Does the proposed dividend include the un paid dividend on cumulative pref. shares ?
OR proposed dividend is raised for the payment of declared dividend on equity shares ?

CA Dileep Surya Kumar

CA Dileep Surya Kumar (Expert)
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25 April 2012 Unpaid dividend and proposed dividend are different.

Proposed dividend means divided proposed by the board of directors and yet to be approved by shareholders in general meeting.
i.e it is just a provision for payment of dividend.

Unpaid dividend means dividend that a company has been announced but not yet paid.i.e liability of the company.

Both can't be clubbed under single head.

CA Nikhil Jhanwar

CA Nikhil Jhanwar (Expert)
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25 April 2012 Here unpaid dividend on Cumulative Pref. Shares are also in nature of dividend which is not yet announced although become due to be paid in the events of profits and that too before paying any dividend to equity shareholders.

SO if there is some amount in the nature of proposed dividend then it must have include dividend on Pref. Shares also because because they have preferential rights over divdend from Equityshareholders