LIVE GST Certification Course by CA Arun Chhajer begins 21st April. Register Now!!

Dividend

Roshan Satkar (30 Points)

16 May 2018

1can board of company can cancelled the declared dividend?

2) can rate of declared dividend be reduced subsequentl?

Reply
Follow
Share

6 Replies

dileep bandi (Student ) (159 Points)
Replied 16 May 2018

1 ) yes

2 ) yes , In AGM share holders can reduced rate of dividend proposed by BOD

Nitesh Yaduvanshi (10 Points)
Replied 16 May 2018

1 once the board declared the dividend then they cannot canceld it

CS M Pota (Company Secreatary) (3180 Points)
Replied 17 May 2018

The Board does not have right to declare the final dividend,the Board can propose the final dividend.The right of cancellation or reduction of the poposed dividend is with Members of the Company attending the AGM.

1 Like

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 19 May 2018

Once recommened / declared the final / intereim dividend board cannot cancell the dividend. However, members have rights in case of final dividend only to reduce the rate of divided while approving it in the AGM.

After declaration, it becomes debt for the Company.

1 Like

CS M Pota (Company Secreatary) (3180 Points)
Replied 19 May 2018

Is there any provisions in the Companies Act 2013 with rules that the final Dividend proposed by the Board can not be cancelled at the AGM by the Members? if yes, please provide.

CS M Pota (Company Secreatary) (3180 Points)
Replied 16 June 2018

When the Board of a Comapny proposed final divided the same is required to be approved by the Memebers at the AGM of the Comapny by passing of an Ordinary resolution.When the members present at the AGM cast their VOTES and the resolution does not get minimum required majority of VOTES which is required to be passed insuch case the resolution is said to be not passed and the resolution is dropped.In such case it is called that the members have cancelled the final Dividend proposed by the Board.The member present may reduce the the final dividend proposed by the Board and /or may cancell the final dividend proposed by the Board.The members of the Conapny present at the AGM can do so.

YES,once the final dividend is approved by the members it will become a debt of the Company but if the final dividend is not declared as above it will not become a debt of the Comapny becasuse the same is not declared.