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Question
Study the following case/situation and express your opinion.
| Admire Ltd., a listed public company of which the board of directors recommended ₹10/- per share as a dividend to equity shareholders: |
- Is it mandatory for Admire Ltd. to take approval from Shareholders?
- Admire Ltd., paid a dividend of 99% to shareholders in cash and the rest 1% in kind. Is it permissible according to the law?
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Solution
- Admire Ltd.'s Board of Directors proposed a Dividend Payable, which shareholders must approve at the Annual General Meeting. It is considered approved and declared by the organization only after it has received the necessary approval.
- The dividend must be paid in cash, not in kind, according to the provisions of the Companies Act. In the case of Admire Ltd., 1% of shareholders are receiving dividends in kind, which is illegal.
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