HSC Commerce 12th Board ExamMaharashtra State Board
Share
Notifications

View all notifications

Distinguish Between Interim Dividend and Final Dividend. - HSC Commerce 12th Board Exam - Secretarial Practice

Login
Create free account


      Forgot password?

Question

Interim dividend and Final dividend.

Solution

  Interim dividend Final dividend
1

Meaning

Interim dividend is the dividend which is declared between two annual general meetings of a company

Final dividend is the dividend which is declared at the annual general meeting of the company.
2

When declared?

Interim dividend is declared when the company makes good profit in the first half of the financial year. I.e. declared before the end of the financial year

Final dividend is declared at the completion of financial year in Annual General Meeting of the company

3

Who declares?

Interim dividend is declared by the Board by passing a resolution if they are authorised by articles

Final dividend is recommended by the Board and declared by the shareholders by passing ordinary resolution (decision) at Annual General Meeting

4

Rate of Dividend

The rate of interim dividend is less than final dividend

The rate of final dividend is generally more than interim dividend.
5

Legal Aspects

Declaration of interim dividend becomes risky and illegal, if company incurs loss at the end of the year.

Declaration of final dividend is always legal, as it is declared only after ascertaining (discover) the correct profit on the basis of the audited accounts
6

Authorisation of Articles

Authorisation of Articles is necessary for declaration of interim dividend

Authorisation (approval) of Articles is not necessary for the declaration of final dividend.
7

Sources for declaration

An interim dividend is declared on the basis of the better financial prospective results may it to be quarterly, half yearly etc

There are number of sources available for declaring the final dividend. It can be declared out of current profits or profits of the previous years or out of reserves or out of capital profits out of the financial assistance specifically provided by Government for dividend

 

  Is there an error in this question or solution?

APPEARS IN

 2014-2015 (March) (with solutions)
Question 2.4 | 5.00 marks
 2017-2018 (March) (with solutions)
Question 2.5 | 5.00 marks
 2015-2016 (July) (with solutions)
Question 2.2 | 5.00 marks
Solution Distinguish Between Interim Dividend and Final Dividend. Concept: Interim and Final Dividend.
S
View in app×