Hi all..Have a simple query. If articles does not contain a provision for payment of dividend in proportion to the paid up capital, shall dividend be paid up on nominal value in respect to the partly paid up shares? Or would regulation 88 of Table A apply in such case?
The Board decidet the Rupee per share as dividend out of the profit of the company on the face value of share. For example:
Face value Rs. 2/-
It meand 20 paise per share is dividend declared on share.
Dear Ajay Sir, thanks a lot for the reply. But actually my doubt is regarding the applicability of regulation 88.
Section 93 allows a company to provide in its articles that dividend be paid in proportion to the paid up capital. So in the example u mentioned, if some shares are partly paid up say upto Rs.1, the dividend per share on these shares will be 10 paise(in case there is a provision as above in the articles). But what if articles are silent on this issue? In that case, should dividend be paid on face value in respect to the partly paid shares? Regulation 88 of Table A provides that dividend be paid in proportion to the paid up capital. Then why is not regulation 88 adopted when articles do not contain a provision in this regard? When articles are silent on an issue, should not the provision of Table A be adopted?
The Regulation is required to be follow mandatorily, the regulations shall have the same bearing as the provisions in the act. The dividend is proposed on the paid up value of shares and not FV. However, if there are no partly paid shares, then ypu will calculate it on FV for solving the questions. In our course the there are very limited questions regarding partly paid shares and in those you will solve according to the regulation itself.
Hope this answers your query.
I am not that much frequent on caclubIndia and so I am replying very late.
As per section 51 of companies act, 2013 - A company may pay dividends in proportion to the amount paid- up on each share if authorised by its articles.
so if a company wants to pay dividend proportionately (i.e. on paid-up amount) then "Article mein likha hona jaruri hai. Agar article mein aisa kuch bhi nahi likha hai to company dividend proportionately pay nahi kar sakti hai.
Therefore, my Answer to this question " If articles does not contain a provision for payment of dividend in proportion to the paid up capital, shall dividend be paid up on nominal value in respect to the partly paid up shares? is YES
The next question is " would regulation 88 of Table A apply in such case"
Now, seriously guyz this is very funny.
Regulation 88 of Table A ka matlab hai ek 88th number ka point jo ki Article mein hai.
Right now It is Regulation 83 of table F
Es table mein Article ka format diya hai ki article mein kya kya ho sakta hai ya hona chahiye. jo ki mostly copy and paste kiya jata hai as it is. Matlab agar aap apni ya kisi ki company incorporate kar rahe ho to aap company ki article ya memorandum khud dimag laga kar word to word type kar ke nahi banaoge, sidhe table copy karoge or apne document pe paste maar doge. Is wajah se regulation 83 apne aap hi copy ho kar aapki company ke articles mein aa jati hai.
ab maan lijiye aapne artice mein point 83 paste nahi kiya hai tab to aaply kaise hoga? jo chiz hai hi nahi wo apply kaise hoga?? kyuki agar aapne us point ko hata diya ya fir paste nahi kiya to us table ka 84th point aapki article ka 83rd point hoga.. hai na! ye jo regulations hai ye aap bare act mein check mat karo. bare act ya market mein jo books hai unme to format hota hai sirf. aap us particular companay ki article check karoge jo company dividend dene ka soch rahi hai or ye ho sakta hai ki us company ke article mein 80th ya 92th number ka point ho jo ki format mein 83rd point pe likha hai.
Regulations of table koi kanoon nahi hai. agar aap us regulation ko apne company ka regulation banana chahte ho to aapko apni company ke article mein likhna hoga.
All the best guyz
ABHISHEK PANSARI