Secretarial Practice · Ch 10 — Dividend and Interest
Overview
Overview
Dividend and Interest — how this chapter fits your Std XII exam
Dividend and Interest is a core chapter of the Maharashtra HSC (Std XII) Secretarial Practice syllabus prescribed by the Maharashtra State Board of Secondary and Higher Secondary Education (MSBSHSE). It studies two of the commonest payments a company makes to the people who have put money into it — dividend (paid to shareholders, the company's owners) and interest (paid to debenture-holders and depositors, the company's creditors) — and the legal machinery, mainly under the Companies Act, 2013, that governs how, when, and out of what a company may make each payment.
Why a Secretary needs to know this chapter cold
Declaring and paying dividend is one of the most closely regulated events in a company's year — miss a deadline or use the wrong source of profit and both the company and its directors can face real financial and criminal liability. The Company Secretary is the officer who actually drives this process end-to-end: drafting the Board's dividend resolution, arranging the separate bank account, ensuring payment within the statutory time limit, and later handling unpaid amounts through the Unpaid Dividend Account and the Investor Education and Protection Fund (IEPF).
This chapter covers, in the order the Maharashtra HSC Secretarial Practice syllabus takes them up: (1) the meaning and definition of dividend; (2) the types of dividend; (3) the legal provisions governing declaration and payment of dividend under Sections 123, 124, 125 and 127 of the Companies Act, 2013; (4) the practical procedure a company follows to pay dividend; (5) the meaning of interest and how interest on debentures and deposits works; and (6) how dividend and interest differ, and what duties fall on the Company Secretary in respect of both.