Dividend

Hi Swati, no company is liable to pay dividends.., i.e there is no provision in companies act compelling any company to pay dividends to its shareholders...

Now, as there is no certainity of DIVIDEND PAYMENT every year, how can any company make charge on such dividend??

In case of liquidation, a company is compelled to sell its assets (on which charge is made) because they are in existence, but how can a company be compelled to sacrifice the payment of dividend, which itself is not compelled by the act....

But, this is my view, lets see what others say..

Hi,

My query is that if a Shareholder is DEBTOR of the Company and is not paying the money. So can a Company set off dividend amount with the OUTSTANDING AMOUNT ?
 

Dear Swati,

Your query is clearly governed by clause (d) of proviso to section 207.

As per the interpretation of clause (d) we may say that a company can lawfully adjust the amount of dividend payable to shareholder against any lawful sum due to it from the shareholder.

Hope this reply would be off some help.

Best Regards