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Question
Study the following case/situation and express your opinion.
Mr. S holds 50 shares of Peculiar Co. Ltd. in demat form. The company has declared a dividend of ₹ 5/- per share and a Bonus of 1:1 to its shareholders.
- How will Mr. S get his dividend?
- Will he get a Bonus share in Physical or demat?
- Who is entitled to dividend and Bonus: Mr. S or the depository? (NSDL in this case)
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Solution
- Under the depository system, the account of the investor is automatically credited in case of corporate action. So, Mr. S will get his divided through the depository in his bank account which is linked with the depository.
- Since Mr. S holds the shares in demat form, the bonus shares also will be received in demat form and will be directly credited to this demat A/c.
- Mr. S is the beneficial owner and hence, he is entitled to the dividend and bonus.
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