Most often, shares are purchased not in order to receive dividends on them, but because of an increase in their market value in the future. The price can be many times higher than any dividend. Stock returns are defined as the ratio of dividend per share to market value multiplied by 100%. The more expensive a share is, the less dividends are often obtained.
It is necessary
Shares and general meeting of shareholders
Instructions
Step 1
The amount of dividends is calculated as a percentage of profit after taxes are deducted, in order to receive them, it is not necessary to hold shares for a whole year. It is enough to own them until the day the register of shareholders is closed. Those shareholders who are entitled to receive dividends can also participate in the general meeting of shareholders. The board of directors of the company convenes a meeting and sets the date for closing the register
Step 2
The board of directors can recommend to the general meeting to pay any amount of dividends, or vice versa not to pay it.
Step 3
Individuals who own shares can receive their dividends on current, card or any other accounts opened in banks by postal orders. Also, funds can be issued through the cashier of the company in cash.
Step 4
Payment terms can be delayed for many months, most often until the end of the year. In some cases, interim dividends are paid for half a year or for a quarter. The reason is often the receipt by the joint-stock company of high profits for the reporting period, which happens in those industries that have a cyclical form of development, where prices for manufactured products vary widely. To approve the extraordinary payment, the board of directors organizes a meeting of shareholders.
Step 5
The company can pay dividends in accordance with the conditions:
- Sources of payment may be the profit that remained with the company after taxation;
- Payment can be made only in proportion to the share of each founder in the authorized capital;
- Only a shareholder of the company can receive income.
Step 6
A company paying dividends is obliged to withhold and transfer tax to the budget, that is, a shareholder does not have to deduct taxes. The received dividends are entered in the tax return as the total amount of unrealized income, after which they are excluded, since the tax has already been withheld by the company, they cannot be taxed again.
Step 7
In accounting, income from shares is included in other income and is recognized as the rights to receive dividends arising from the contract arise. This right appears to the recipient on the day the general meeting makes a decision to pay dividends, or on the day of receipt of the notification of the accrual of income.
