2. The Law is that a company is not compelled to pay dividends; but if it decides to pay dividends, it must pay same from the profits of the company.
3. The Board of Directors recommends the amount to be declared as dividends to the Annual General Meeting (AGM), which may in turn reduce or approve it.
4. The Annual General Meeting cannot increase the dividend recommended by the Board of Directors.
5. Once dividend has been approved or declared, it must be paid and it can be recovered as a debt by action in court within 12 years of the dividend being in arrears.
© Onyekachi Duru Esq and www.legalemperors.com, 2016 (All Rights Reserved). Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excepts and links may be used, provided that full and clear credit is given to Onyekachi Duru Esq and www.legalemperors.com with appropriate and specific directions to the original content.
The post you have just read and indeed all other posts emanating from http://www.legalemperors.com contains general legal information and does not contain legal advice. http://www.legalemperors.com is not a law firm or a substitute for a lawyer or law firm. The law is complex and changes often. For Legal Advice, please ask a Lawyer