Question

Study the following case/situation and express your opinion.

Aspire is a listed public company of which the board of director recommended ₹10/- per share as a dividend to equity shareholders:

1. Aspire Ltd. takes approval from Shareholders?
2. Aspire Ltd. paid dividend partly in cash and partly in kind. Is it permissible according to the law?

Answer 1

1. Aspire Ltd's Board of Director proposed a Dividend Payable; which should be mandatorily approved by shareholders in the Annual General Meeting. Only after the due approval, it is considered to be approved and declared by the organisation
2. As per the provisions of the Companies Act dividend should be paid in cash and. not in kind. In case of Aspire Ltd a dividend paid in kind is a contravention of the law.