- This topic has 1 reply, 2 voices, and was last updated 7 years ago by
.
- Posts
Are dividends given to shareholders who still owe the company on share capital or dividends when provided for are used to cover their debts ?
This is a valid question … in theory! I am not aware of ANY situation where a shareholder still owes money in respect of the acquisition of shares by that shareholder
However, it could be the case that a company has issued shares that are not yet fully called-up – so we have a situation where shares are issued and partly paid
In that situation, it would be possible for the company to declare a dividend on those partly paid shares but I imagine that the dividend will in fact be paid to those shareholders of the partly paid shares
In the context of an exam question … I believe that the chances of your question being asked would fall into any definition of ‘remote’
OK?
- The topic ‘Dividends’ is closed to new replies.