DIVIDENDS 
[i 
either in the directors with the sanction of a general meeting, 
or in a general meeting of shareholders. Where the power 
is vested in a general meeting, it is commonly provided that 
no dividend shall be declared exceeding in amount that recom- 
mended by the directors. The directors are generally 
authorised by the articles to pay to the members such interim 
dividends as the profits of the company appear to them to 
justify. 
ALL dividends must be paid in cash, unless the articles 
authorise some other form of payment [Wood v. Odessa 
Waterworks Co. (1888), 42 Ch. D. 636]. 
Unless the regulations otherwise provide, dividends are 
payable in proportion to the nominal amount of share capital 
held by each shareholder, irrespective of the amount paid up. 
For example, A has ten £1 shares with 5s. paid up on each, 
B has ten £1 shares with 10s. paid up on each; a 10 per cent. 
dividend is declared; both A and B receive £1. [Oakbank 
Oil Co. v. Crum (1883), 8 A.C. 65; re Bridgewater Navigation 
Co. (1889), 14 A.C. 525]. The regulations of a company 
usually, however, provide for the payment of dividends in 
proportion to the amount of capital paid up by each share- 
holder, as permitted by s. 48 of the Act. 
Dividends must be paid in accordance with the rights of 
the shareholders as fixed by the memorandum or articles of 
association. Thus the capital of a company may be divided 
into shares of different classes, e.g. preference and ordinary 
shares, and dividends must be paid accordingly. As tc 
cumulative dividends see Chapter V. 
All dividends become due immediately they are declared, 
and they are treated for all purposes as a debt due from the 
company to the shareholders [Severn Railway Co. (1896), 1 Ch. 
559], except that under most articles they do not bear interest 
against the company and that in a winding up they do not 
rank as debts in case of competition between a member and a 
creditor who is not a member [s. 157 (1) (g)]. Even if a 
dividend is declared payable in instalments the right to receive 
the whole dividend vests in the members immediately and a 
transfer of shares after such declaration does not pass the 
right to instalments subsequently pavable (re Kidner' 
Agreement (1929) 2 Ch. 121]. 
A dividend due will become barred by the Statute of 
Limitations if not claimed within twenty years from the date 
of declaration [Artisans Land Corporation (1904), 1 Ch. 796]. 
The length of time within which a dividend can be claimed 
is often provided for in the regulations of the company, the 
number of years varving in different companies. It is thought