Board of Directors of XYZ Limited proposed the dividend at 12% on equity shares for the financial year 2023-24. The same was approved in the annual general meeting of the company held on 10th September, 2024. The Managin
CS Executive · Company Law · PYQS · December 2024
Board of Directors of XYZ Limited proposed the dividend at 12% on equity shares for the financial year 2023-24. The same was approved in the annual general meeting of the company held on 10th September, 2024. The Managing Director seeks your opinion on the following under the provisions of the Companies Act, 2013: Akruti was the holder of 1,000 equity shares on 31st March, 2024, but she transferred the shares to Raka, whose name has been registered on 20th May, 2024. Who will be entitled to the above dividend ?
Answer & Explanation:
According to section 123(5) of the Companies Act, 2013, the dividend shall be payable only to the registered shareholder of the share or to his order or to his banker. Facts in the given case state that Akruti the holder of equity shares, transferred the shares to Raka whose name has been registered on 20th May 2024. Since he became the registered shareholder before the declaration of the dividend in the Annual General Meeting of the company held on 10th September 2024, Raka, being the registered holder and not Akruti shall be entitled to the dividend and not Akruti.
Topics: Declaration and Payment of Dividend
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