Dividend can be paid on advance amount of calls received

Ans. False:


(1) By dividend we mean the return paid to a shareholder out of profits distributed by the company.

(2) Call amount is paid towards unpaid value of shares in case of partly paid shares.

(3) For some reasons, a share older may decide to make advance payment of calls for his own convenience.

(4) Dividend is paid on paid - up value of shares; uniformly to all the shareholders of company.

(5) If the Articles of company permit, interest may be paid on advances made towards calls.

(6) But, there is no provision to pay dividend on the advance payment of calls.