How is dividend paid out?

Dividends are the income of shareholders. The procedure for their payment is by law common to all joint-stock companies and depends only on the organizational and legal form of the enterprise. Payment of dividends is made by decision of the general meeting of members of the joint-stock company after the calculation of profits for a certain period of activity on the recommendation of the board of directors. The absence of a resolution of the general meeting excludes the accrual of dividends, and shareholders have no right to demand them until such event takes place.

Members of the general meeting have the right to reducethe recommended amount of dividends, but can not increase. The dividends are declared without taking into account tax payments. Dividends usually spend exactly half of the revenues received, which depend on the value of shares on the market, from the stage of development of the joint-stock company. Each shareholder is entitled to timely payment of dividends in proportion to the number of shares held by him, if they are acquired not less than one month before the maturity date. Profitability of shares depends on the profit of the enterprise, and on the number of placed shares.

Payment of dividends to the founder may beis made on common or preferred shares. Ordinary securities allow owners to directly participate in the company's activities. A preferred stock is focused, first of all, on making a profit. In the first case, the shareholder receives dividends only after the liquidation of all debts and the satisfaction of creditors' claims. And the owners of preferred shares are paid dividends in the first place. They also retain the advantage of getting their share, the corresponding value of shares, if suddenly there is a need to liquidate the joint-stock company. In addition, fixed income is established on preferred shares when issuing them, which means that payments by holders of this category of securities are mandatory, even if the remaining shareholders are deprived of dividends by the decision of the general meeting because of the loss of the enterprise.

Privileged shares are issued in severalvarieties. They can be convertible and revocable. Convertible preferred shares have the ability to exchange for other securities of the same joint-stock company. And recall copies give the right to its owner to withdraw them from circulation.

And payment of dividends on preferred shareshas a different character. According to the results of the joint-stock company's activities, holders of preferred securities can be paid dividends: fixed, floating, with participation, guaranteed, ex-dividend and cumulative.

Payment of dividends on shares may be quarterly, semi-annual or annual and be made in full or in part in cash or in paid assets, that is shares.

Payment of dividends to the founder is made only on the shares that he holds on his hands and are fully paid. In the same case, if the shares:

• not posted,
• purchased, but are on the balance sheet of the joint-stock company,
• bought out, but at the request of the board of directors are on the balance sheet of the company,
• withdrawn at the disposal of the joint-stock company due to violations committed by the shareholder,

then payment of dividends on shares is not accrued and is not made.

The actions of the administration are considered illegalof a joint-stock company that deprives a shareholder's dividends for a disciplinary offense. This is illegal, because the shares are not included in the labor sphere, but are connected with the right to dispose of personal property.