From LawDepot Law Library
Definition of "Dividend"
- Generally, a dividend is a share of a surplus or something extra.
- In regards to corporate affairs, a dividend is a payment made to shareholders out of the corporation's profits based on the number of shares they own. Payment can be in the form of cash, new shares or even an ownership interest in other corporate property. Dividends on preferred shares will usually be for a fixed amount each year and may be cumulative or non-cumulative. Dividends on common shares typically vary depending on the profits of the company.
- In bankruptcy, a dividend is a payment pro rata to a creditor of a person adjudged bankrupt.
"Dividend" is referred to in the following legal documents:
Articles of Incorporation
Shareholder Agreement
See also:
Cumulative Dividends
