DIVIDENDS

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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