How to distribute dividends

Instruction
The payment of dividends on shares is the obligation of the joint stock company. Dividends are paid in certain periods (quarter, half year, nine months, fiscal year). The source of dividend payment is the net profit of the joint stock company - according to the financial statements.
The process of distribution and payment of dividends begins with the adoption by the joint-stock company (general meeting of shareholders) of the relevant decision. The general meeting of shareholders determines the amount of dividends and the form of payment for shares of all categories and types. Prior to this, the board of directors of the joint stock company recommends an approximate amount of dividends to the general meeting of shareholders, and the general meeting does not have the right to paydividendsmore than recommended.
The general meeting of shareholders shall also determine the period and procedure for payment of dividends, if they are not determined by the charter of the joint-stock company. Dividends must be paid no later than 60 days from the date of the decision of the general meeting on their payment.Dividends on one category of shares are paid simultaneously to all shareholders who own shares of this category.
The legislation provides for cases when joint stock companies are not entitled to decide on the distribution of dividends and, accordingly, distribute them. These cases include:
1. incomplete payment of share capital;
2. the presence of a joint-stock company signs of bankruptcy or their possible appearance after the distribution of dividends;
3. The value of the net assets of the joint-stock company is less than its authorized capital and reserve fund.
If the decision on the full payment of dividends on preferred shares, the amount of dividends for which is established by the charter, is not taken by the joint-stock company, then the company is not entitled to decide on the payment of dividends on ordinary shares and on those preferred shares for which no dividends are paid.


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