In order to calculate the dividend to be declared on a class of shares, it comes to follow the dividend rate established for such class as mentioned in the share capital structure appearing in the articles of the business corporation.
Before declaring a dividend, the board of directors will thus have to consult the share capital of the business corporation in its articles for establishing the dividend to be declared.
Thus, a dividend can:
In the case of shares with no voting rights but entitled to receive a cumulative dividend, the share capital structure can provide that if a dividend declared was not paid or remained unpaid after a certain period of time (eg., two or three years) following its declaration, shareholders holding these shares will then have the right to vote at meetings of shareholders, on the basis of one vote per share held, as long as full payment of this dividend will not have been paid. In view of this possibility, it should be noted that this cumulative dividend will begin as from the first day of the month following the date of issue of shares of that class or as from any other date, not posterior of more than six (6) months from the date of issue of shares of that class, determined by the board of directors. However, it should be noted that we rarely find this type of clause in standard share capital structures.
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