Q&As

What remedies may be available to a shareholder as regards non-payment of a dividend?

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Published on LexisPSL on 16/03/2021

The following Corporate Q&A provides comprehensive and up to date legal information covering:

  • What remedies may be available to a shareholder as regards non-payment of a dividend?

What remedies may be available to a shareholder as regards non-payment of a dividend?

The general rule is that dividends must be paid in accordance with the rights attaching to a company’s shares. It cannot be assumed that different shareholdings, even if they appear to be of the same class of shares, necessarily attract the same rights to a dividend without a careful examination of the articles of association, any relevant shareholders’ resolutions and any shareholders’ agreement (see Q&A: Is it possible to pay a dividend to one shareholder but not another? and, for general information on the procedure to be following in relation to the declaration of, and payment of, a dividend, see Practice Note: Dividends—the legal framework).

In the absence of anything to the contrary in a company’s articles, payment of dividends is made according to the nominal value of a share, without reference to the amount that is paid up on it. However, the 1985 Table A articles and the model articles for public companies expressly provide

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