Section 426 CAMA 2020

Section 426 Companies and Allied Matters Act is about Declaration of dividends and payment of interim dividend. It is under Chapter 16 (Annual returns) of the Act.

(1) A company may, in general meeting, declare dividends in respect of any year or other period only on the recommendation of the directors.

(2) The company may from time to time pay to the members such interim dividends as appear to the directors to be justified by the profits of the company.

(3) The general meeting has power to decrease the amount of dividend recommended by the directors, but has no power to increase the recommended amount.

(4) Where the recommendation of the directors of a company with respect to the declaration of a dividend is varied in accordance with subsection (3) by the company in general meeting, a statement to that effect shall be included in the relevant annual return.

(5) Subject to the provisions of this Act, dividends is payable to the shareholders only out of the distributable profits of the company.