Preference Dividend

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 July 2011 Helo,

I have a question that whether it is compulsory to pay dividend to Non Cumulative preference shareholders in case there is profit in the company, if yes then give justification regarding such....

Guest

Guest (Expert)

11 July 2011
Shares being ‘Preference’ itself suggest that such shareholders shall Rank Prior in Payment of any Dividend.

Querist : Anonymous

Querist : Anonymous (Querist)

11 July 2011 but dear i want to know whether it is compulsory to pay dividend to non cumulative preference shares in case of profit in the company....

Guest

Guest (Expert)

11 July 2011
No it is not compulsory to pay any dividend to Preference shareholders in case, there is Profit but company does not want to pay any dividend.

But if company wishes to pay dividend to Equity shareholders it can do so only after paying dividend to Preference shareholders.

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

11 July 2011 but dear i want to know whether it is compulsory to pay dividend to non cumulative preference shares in case of profit in the company....

Querist : Anonymous

Querist : Anonymous (Querist)

11 July 2011 But yar i need justification of such interpretation.....

Guest

Guest (Expert)

11 July 2011
Justification lies in the characteristics of the ‘Two Different Shares’.
Equity & Preference.

Situation 1:Do not pay any Dividend to any Shareholder:

Company is justified as it is not bound to pay any Dividend by any obligation to any shareholder, whether Equity or Preference.

Situation 2: If Company pays any Dividend, first pay to “Preference Shareholders”:

Equity shareholders are owners of the Company. They are the one who has entitled “Preference Shareholders as such”. Such shareholders therefore enjoys such Priority.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

office docs

Arun Borad

MUNISH KUMAR

RISHI LATTA

CA Aakarsh Jain

Subscribe Now

Preference Dividend

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

GST CONSULTANT

Senior Executive

Manager- Finance and Compliance

GST CONSULTANCY

CA Final

Accountant