Section 51 of the Companies Act, 2013
Section 51 of the Companies Act, 2013 – Payment of Dividend in Proportion to Amount Paid-up
Section 51 of the Companies Act, 2013 states:
"A company may, if so authorised by its articles, pay dividends in proportion to the amount paid-up on each share, where a larger amount is paid-up on some shares than on others."
📌 Key Points:
Authority from Articles: The company must be authorized by its Articles of Association (AoA) to pay dividend in proportion to the paid-up value of shares.
Proportional Dividend: If shareholders have paid different amounts on their shares (partly paid shares), then dividend can be declared in proportion to the amount paid-up on those shares.
Not Always Equal: Dividend need not be equal per share, especially in case of partly paid shares – it will depend on the amount actually paid-up.
✅ Example:
Suppose Shareholder A has paid ₹10 per share on 100 shares (fully paid), and Shareholder B has paid ₹5 per share on 100 shares (partly paid).
If the Articles allow, the company can pay dividends proportionally – meaning Shareholder A will receive more dividend than Shareholder B.
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