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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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XVII. Dividents

Collection:: Economics Books

DIVIDENDS IQT and probably will, be necessary to make certain alterations in its articles of association. The reserve fund article must authorise the payment out of the reserve fund of a special dividend or bonus; and, further, there must be a power to satisfy a dividend or bonus by the issue of fully or partly paid shares. For, as has been stated above, dividends can only be paid in cash, unless some other form of satisfaction is authorised by the articles. The article which enables the company to satisfy the bonus by the allotment of fully paid shares will authorise the company, by resolution in general meeting, to capitalise any part of the undivided profits and to distribute the same as a bonus, power being given to the directors to make provision as to fractions. The Capital Redemption Reserve Fund may be used for paying up and issuing fully paid bonus shares in the event and to the extent specified in s. 46 (5) (see supra p. 39). The articles having been altered if and so far as is necessary, and the capital of the company, if necessary, increased, the resolution to capitalise will be passed, and the matter in due course carried out. If the article is so framed that it is neces- sary expressly to declare a bonus, the bonus will be made pay- able free of income tax. This can be done as the company will have already paid income tax on the profits used for the purpose of the bonus if they are taxable, while if they represent capital appreciation or premiums received on the issue of shares, they will not, at any rate, unless distributed in cash, be liable for income tax. The article is, however, often framed in such terms that the resolution need not expressly declare a bonus. For an example of such an article, see Palmer's Company Precedents, 13th edition, Vol I, p. 750. Bonus shares so issued are issued for a consideration other than cash, and therefore, on making the return as to allot- ments (see s. 42), a contract or contracts constituting the title of the allottees to the shares must be filed. In cases where the issued shares of a company are not fully paid, a dividend can be declared out of the undivided profits, and a call made on the shares, payable on the same date. The shares thus become fully paid and profits to the extent of the unpaid liability capitalised. It would, however, be better, in order to avoid any claim for income tax, to proceed ander an appropriate article authorising the application of reserve fund or other undistributed profits in paying ur partly paid shares. On the declaration of a dividend, warrants must be pre- pared. In practice it is usually possible to prepare and fill in all warrants and have them ready for despatch before Dividend Warrants.

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