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UKSolicitorJA
UKSolicitorJA, Solicitor
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Experience:  English solicitor with over 12 years experience
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Sale of shares and dividend - where do I stand. I sold my

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Sale of shares and dividend - where do I stand.

I sold my company shares back to the Company. The articles of association were altered to allow this to happen, including the company having a fair share value set by an independent auditor - this did not happen we had a Dutch auction. the shares were eventually sold and the register changed on the 22nd of Oct 2013.

The company distributed dividend cheques in January 2014 based on the company financial year to the 31st 0f March 2013. I received no dividend for the shares I held then (I am still a shareholder)

On querying the fact I was informed that my shares were sold before a dividend was announced at the Board meeting in October 2013 therefore were ex dividend.

On requesting the date of the October 2013 Board meeting I received a note from the Company Secretary quoting the minute book as follows:-

The Board meeting was on the 15th October 2013 and states " Dividend to be paid in January, as per last year, value to be decided"

The Board meeting was on the 11th December 2013 and states " Dividend to be paid in January 4p and to send to shareholders annual company update. "

I have been a shareholder for 25 years and a Director for 18 years prior to retirement. No discussions were held during the sale regarding a dividend payment or any possibility of the shares being sold ex dividend.

2 questions;

1) Can the Directors just ignore a specific requirement of the Articles of Associations?

2) I understand a dividend must not be declared unless the Directors have made a recommendation as to its amount. Here on the 15th of October, a Dividend was announced and when it would be paid where do I stand?

James McDonald.
Submitted: 3 years ago.
Category: Law
Expert:  UKSolicitorJA replied 3 years ago.
Hello,

To answer your questions:

1) No, they cannot do so;

2) In my opinion, you are eligible for the dividend declared as ex dividend dates are relevant for public companies whose shares are trading on stock exchanges, in your case, it seems to be a private company and it seems that the company/directors are wrongly not paying you the dividend.

The dividend is in respect of a financial year when you held the shares and your name was only removed from the register on 22/10/2013 whereas the directors recommended the dividend on the 15/10/2013.

You have a good claim for the dividends and it may appear that you have to take court action against the company for the money to be paid to you.

Hope this helps
Customer: replied 3 years ago.

Thank you you are right, it is a private family company.


 


am I correct in assuming the second board meeting in Dec. stating the dividend at 4p, is irrelevant and what would be the point of quoting it?


 


Now AGM's for small company's are no longer compulsory, what minimum mandatory information is a small company obliged to provide for its shareholders regarding EG a dividend payment?


 


JMcD

Expert:  UKSolicitorJA replied 3 years ago.
James,

It seems like a plot to deny you of your entitlement to the dividend as I advised previously.
UKSolicitorJA, Solicitor
Category: Law
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