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Kunal Khilnani (Service)     08 September 2010

DIVIDEND to shareholders

Hi,

ABC Pvt Ltd has 3 shareholders (A, B & C).

The company makes decent amount of profit every year.

Can the company give dividend to only A ?

If yes, any special complaince/procedure to be followed?

I feel the companies act is silent on my query and hence such dividend can be paid only to A.



Learning

 8 Replies

harsh asthana (advocate)     08 September 2010

The companies act is very clear and dividend what ever and when ever declared has to be given to all share holders as per their holdings.

1 Like

P.K.Haridasan (Advocate)     09 September 2010

Dividend is paid to the shareholders. As per Companies Act, the equity share holders are having equal footing. One cannot give dividend to  some one and   others not. 

1 Like

V. VASUDEVAN (LEGAL COUNSEL)     09 September 2010

I concur with Adv.Haridasan's views. The shareholders having equitable rights, dividend cannot be given to a particular holder alone.

1 Like

Kunal Khilnani (Service)     10 September 2010

Dear Sirs,

Your valuable comments are sincerely appreciated. However, if B & C give in writing that they renounce their rights to dividend for that year or particular case, can then the dividend be given to only A ??

Thanks.

Siddhi Agarwal (Owner)     10 September 2010

Only fools will give such consent. Who does not want money that too when co. is making good profit and why you want to deprive other share holders of the dividends due to them?

V. VASUDEVAN (LEGAL COUNSEL)     12 September 2010

there has to be a premise/basis for renouncement say a valid consideration either cash some tangible benefit. Also in whose favour a shareholder will renounce his dividend. these are key issues for the proposal.

P.K.Haridasan (Advocate)     15 September 2010

If they so like, they can withdraw the money from the Company and pay to A. Mind, the drawn money will be treated as income in your account and money  paid to A will be treated as gift. and respective tax provision will  apply.

 

 

 

 

 

1 Like

Kunal Khilnani (Service)     16 September 2010

Dear Mr. Haridasan, Vasudevan,

 

Many many thanks for your valuable comments.

 

Regards,

Kunal


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