Hello everyone, I am new to this website, so apologies if this is in the wrong place, but I didn't know where else to ask to any help would be appreciated
What can somebody do (lets call them mr.B) if they have preference shares and are the director of a company, along with two other directors (those two have ordinary shares)
> the preference shares come on the condition of no voting rights usually, but one of the articles of assosiation holds that "in the event dividends are in arrears they can vote on dividends issues"
> the other two shareholders held a meeting and decided to pay themselves dividends ....... but have not paid "MR.B" who's dividends are in arrears
please, any help would be appreciated thanks in advance
Replies (4)
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Legal
Definitely a legal question. Difficult to say with such little background but preference shares should certainly be paid before ordinary shares.
Ask them
Hi - do you know if the dividend on the ordinary shares was OKd by the directors or shareholders?
In the majority of cases these days dividends are approved by directors, without recourse to the shareholders, and so, as a director, you would/should have been party to the meeting, unless you were invited and didn't attend, they can't exclude you.
They could however have OKd the dividend as shareholders and so, if the voting rights of your shares give you a voice, again, you should have been party to the meeting.
Certainly ask them why your dividends were not paid and why you were excluded from the meeting.