The query is that if we allot new class of shares between Dec to March to the promoters’ group on preferential basis and in case we declare dividend. Whether dividend is to be paid fully or for the period the new shares remain outstanding.
My opinion:-
As we all know that the dividend is the profit of Company which is to be distributed among shareholders and it is always distributed on the basis of number of shares. Dividend does not have any relation with the period for which the shareholder or the shares remains outstanding. Therefore, in my opinion, the dividend is to be paid fully.
Confusion:-
Promoters have, initially invested in the money in the Company as Deposits and the Company is paying interest. However, in case the deposit holders withdraw the deposit after the period of 9 months, after getting the interest of 9 month of the financial year, and if they invested in shares they would be entitled for the dividend for whole year. They would get income twice on such money which would not be justifiable.
Please give your valuable opinion.
CAclubindia
