Dividend on preference shares

This query is : Resolved

Jeenal Jain (Querist)
Follow

13 January 2012 Please Help

If the company makes profit, can the dividend on cumulative preference shares be cumulated and paid at a later stage?????

CS Ankur Srivastava

CS Ankur Srivastava (Expert)
Follow

13 January 2012 There are two types of preference shares
1. Cumulative
2. Non Cumulative

In case of non cumulative preference shares dividend is to be paid in case of profit making year only.

In case of cumulative preference shares, dividend cumulates and in case there is no profit at any year, in the year of profit such loss making year dividend is also to be paid.