Dividend

In relation to a company, the profit of trading divided among the members in proportion to their shares and in accordance with their rights as shareholders. Dividends may be payable in respect of preference shares and ordinary shares, the payment first being made in respect of preference shares. There may be both one or more interim dividends as well as a final dividend. Shareholders cannot insist on the payment of dividends, even where the profits are amply sufficient, if the directors decline to declare a dividend, except in the case of fraud. Dividends must be paid in cash unless the Articles of Association of the company state that payment may also be made in e.g. paid up shares or debentures.