Interim dividend

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lalitha (Querist)
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14 February 2012 Hi

Can anyone help me out in the following situation

A company declared interim dividend assuming profit but ended with a loss. Previous years were also loss. Now what will be the consequence of not paying the dividend and the liability of the Directors in the said situation?

Tks

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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14 February 2012 The declaration of an interim dividend does not create a debt against the company.The Directors can very well rescind the resolution before payment. Thus, the shareholders do not get any vested right under a Directors’ resolution declaring an interim dividend.

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