BASIC CONCEPT RELATING TO DIVIDEND

Declaration of dividend is an ordinary business transaction in every general meeting. a company is entitled to declare two types of dividend which is known as interim dividend and final dividend. Interim dividend is declared during the year by board of directors. Generally dividend means final dividend which is declared at the end of the year by the shareholder. Although shareholders declares dividend at the annual general meeting the rate at which dividend should be declared is recommended by board of directors. According to companies act 2013 shareholders of a company only declares dividend on the basis of recommendation made by the board of directors at their board meeting. Shareholders cannot manipulate the rate which is recommended by the board of directors. They only declares.