Secretarial practice

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Monograph

Identifikator:: 1828236004

URN:: urn:nbn:de:zbw-retromon-249926

Document type:: Monograph

Title:: Secretarial practice

Edition:: fourth edition

Place of publication:: Cambridge

Publisher:: W. Heffer & Sons Ltd

Year of publication:: 1930

Scope:: viii, 987 Seiten

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XVII. Dividents

Collection:: Economics Books

88 SECRETARIAL PRACTICE that there is no illegality in providing in articles that dividends unclaimed for a specified time will be forfeited, though one learned text-writer (see Palmer's Company Precedents, Vol 1, 13th edition, p. 754) suggests that such a provision is of doubtful validity. In any event the Committee of the Stock Exchange object to any such provision (see Appendix D), and conse- quently if an Official Quotation is desired it should not be inserted. Out of what A form of resolution to pay a dividend is given in Chapter Moneys XIV. Payable. As stated above, the fundamental rule with regard to the payment of dividends is that no dividends shall be paid out of capital; a payment of dividend out of capital is an ultra vires act on the part of the company, and constitutes a breach of trust by the directors, and renders them liable to make good to the company any amount so paid [Oxford Building Society (1887), 35 Ch.D. 502; Flitcroft’s Case (1882), 21 Ch. D. 519; Masonic Assurance Co. v. Sharpe (1892), [ Ch. 154]. No such payment can be made, even though the memorandum [Verner v. General and Commercial Trust (1894), 2 Ch. 239], or articles [Trevor v. Whitworth (1887), 12 A.C. 409; Masonic Assurance Co. v. Sharpe (see above)], or a general meeting [Flitcroft’s Case (see above)] purport to authorise it. But although no dividend can be paid out of capital, yet a dividend can be paid out of moneys which are certainly not ‘net profits.’ A difficulty has been felt in drawing the line between capital and net profits, chiefly arising from the various methods in which depreciation or loss of assets may be dealt with. The Companies Acts have not required any uniform system of book-keeping, and consequently it happens that companies deal with depreciation or loss in many different ways: some provide out of revenue for depreciation or loss as it arises; others only partially, or not at all. Given the same amount of depreciation or loss and the same revenue, the net profits may apparently be increased or reduced according to the method employed in dealing with deprecia- tion or loss. [See Spanish Prospecting Co. (1911), 1 Ch. 92, as to the meaning of profits]. The question then arises whether dividends can be paid out of the revenue, or only out of the net profits after taking from revenue such amount as may be necessary to keep. the capital intact, The answer depends upon the constitution and objects of each company [Davison v. Gillies (1879), 16 Ch. D. 347 (n); Dent v. London Tramways Co. (1880),

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