Dividend

Resolutions 975 views 4 replies

Krutesh Patel

ACA

727 Points Joined July 2009

A company had capital of 20,00,000 on 31 march 2009. It raised further 10,00,000 on 31 march 2009. on 15 july directors declare dividend. But they do not want to pay dividend on new shares which they raised. Is this allowed?

Replies (4)

Rahul Chobdar

Chartered Accountant (Financial Manageme

561 Points Joined March 2009

The dividend will have to be paid on the whole share capital because the new shares are issued during the Financial Year & accordingly are eligible for dividend pertaining to F.Y. 2008-09.

Ajay Mishra

Company Secretary

74352 Points Joined March 2009

Dear Mr. Krutsesh Patel

A company may close register of members for the purpose of ascertaining who are eligible to receive dividends on the date of declaration of dividend. In case of the AGM, the persons who are members as on the date of AGM will be eligible to receive the dividend as the dividend is approved by the members on the day when the AGM is held.

So on the date of AGM the fresh alottee (new Shareholder) will also be eligible to dividend. The new share will also cover for dividend.

Regards

Ekta

Practicing CS

423 Points Joined April 2009

Yah, The share holders as on the record date shall be eligible for the dividend declared in the AGM. Old as well as new share holders (allottees for the 31st March, 2009 allotment) shall be eligible for DIvidend.

P C Agrawal

Registered independent director Past Ch

8229 Points Joined March 2007

Yes, shares allotted on 31.3.09 will also be eligible for dividend. However, subject to the provisions of your Articles, dividend can be declared and paid on new shares on pro-rata basis and in that case they will get dividend for one day only.