FORMS OF DIVIDEND PAYMENT OF ENTERPRISES

FORMS OF DIVIDEND PAYMENT OF ENTERPRISES

 

1. What is dividend?
Dividend is the net profit paid for each share in cash or other assets from the remaining profit of the joint stock company after fulfilling its financial obligations.
2. Forms of dividend payment ?
– Cash dividend payment: Cash dividend is a form of dividend that the company distributes profits to investors in the form of cash (or bank transfer).
For individual investors, the receipt of cash creates peace of mind for shareholders when continuing to invest in the company and seeking profits in stock investment. Furthermore, receiving cash dividends is more beneficial if the shareholder needs money for personal consumption purposes.
For institutional investors, cash dividends on cash dividends bring a certain source of revenue because the investment method of these subjects is often long-term.
– Stock dividend payment: This method is applied when enterprises are in need of capital and want to retain shareholders’ profits for investment purposes.
– Paying dividends by other assets according to the company’s charter: Depending on the charter of each company, this additional form of dividend payment is required. Shareholders will receive the finished products, goods or real estate.
3. Conditions for dividend payment:
When the company meets the following conditions, dividends will be paid:
– The company has fulfilled tax obligations and other financial obligations;
– Appropriated company funds and fully offset previous losses;
– Immediately after paying all the dividends specified, the company still ensures to pay all due debts and other property obligations.
4. Time limit for dividend payment:
Since the end of the Annual General Meeting. Dividends must be paid to full shareholders within 06 months,
In case the company pays dividends in shares, it is not necessary to carry out the procedures for offering shares; it only needs to register to increase its charter capital in proportion to the total face value of shares used to pay dividends and the registration. must be conducted within 10 days from the date the company completed the payment of dividends.

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