Hi Members,
Please help me...
A Shareholder hold Preference share (Cummulitive ) in a company know that company is not declaring dividend since long insted of having profit... know
1) Is there any provision to help the shareholder to get its dividend?
2) Is a company or its director can be penelise for not declaring dividend?
No, it is the wish of management whether they declare dividend or not...
DEAR EXPERTS..
DIVIDEND CAN ONLY BE DECLARED WHEN THE COMPANY MAKES PROFIT AND THE SAME HAS BEEN MENTIONED IN THE ARTICLES OF ASSOCIATION OF THE COMPANY. IT DOES NOT DEPEND ON THE WHIMS AND FANCIES OF THE COMPANY TO DECLARE DIVIDEND.
REGARDS..
TANVEER MD MASOOD
Cumulative preference shares enjoy the right to receive the dividend it is not upon management to declare or not to declare dividend on these types of shares. Dividend is to pe paid to holder of Cumulative preference shares every year when Company is earning profit and in case of no profits or insufficient profits, the arrear of previous years will be paid in the year in which company earns profits. In other words, dividend on these shares will go on accumulating until it is paid in full with arrears.
The dividend of Cumulative Preference shares is cumulate every year and will be paid in the year company having profit and declared dividend.
CAclubindia
