Secretarial practice

Bibliographic data

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

CHAPTER XVII DIVIDENDS Payment of Interest out of Capital. Payment of Dividends T'HE payment of a dividend is a distribution, intended to be made periodically by a company among its shareholders, of its net revenue or profits. No dividend can be paid out of capital, except in the special circumstances mentioned in s. 54 of the Act, and subject to the provisions of the section. The section extends to companies incorporated under the Companies Acts the powers usually granted by private Acts of Parliament to statutory undertakings, e.g. railway companies, of paying out of capital interest on paid-up capital during the unprofitable period of construction of works. The section only permits interest to be paid on shares which are issued to provide money for the construction of works or buildings, or the provision of plant, ‘which cannot be made profitable for a lengthened period.” It seems likely that the Courts will not be troubled with decisions as to what constitutes ‘a lengthened period’ in each case, seeing that the previous sanction of the Board of Trade is required to any such payment of interest as the section allows. So far as the company is concerned, all that it can do is to take care (1) that the shares are issued solely for the purpose of defraying expenses of the kind specified; (2) that the articles are, if necessary, altered, or a special resolution passed, to authorise the payment; (3) to apply to the Board of Trade for its sanction. If the Board of Trade grants its sanction, the company (1) may charge such payments to capital as part of the cost of construction; (2) must show in its accounts, from time to time, the capital on which, and the rate at which, interest has been paid during the period covered bv the accounts. The Board of Trade determines the period for which interest may be paid, which must never extend beyond the end of the half-year next after the half-year in which the works, &c., are completed. No higher rate than 4 per cent. or such other rate as may for the time being be prescribed by Order in Council, can in any circumstances be paid. An Order in Council of 17 December, 1929, prescribes that the rate ‘shall in no case exceed 6 per cent. per annum.’ The power to declare a dividend can be vested by the articles in the directors absolutely, but is usually vested R6

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