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Question
Justify the following statement.
Listed Company has to follow additional guidelines on dividend matters.
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Solution
- A listed company must comply with the Companies Act, 2013 (e.g., declare a dividend only out of profits/free reserves; transfer the declared amount to a separate bank account within 5 days; pay within 30 days; move unpaid amounts to the Unpaid Dividend Account and then to IEPF after the prescribed period).
- It must also follow SEBI (LODR) Regulations: give prior intimation of the Board meeting where a dividend is considered, disclose the decision and amount to stock exchanges, fix and intimate the record date in advance, declare a dividend on a per-share basis, and (for specified listed entities) publish a Dividend Distribution Policy (Reg. 43A).
- These additional disclosure and timeline requirements exist to ensure transparency and investor protection in the securities market.
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