Ø Dividends once declared become debts.
Dividend is the share of profit payable to the shareholders. Profit may be distributed to the shareholders by the way of dividend, declared by the company’s director. Once declared, the dividend becomes a debt of the company owned to all shareholders entitled to share the dividend.
When a dividend is declared, it shall be paid within two months from the date of declaration.
Provided that the period of two months shall not apply in case where-
Ø There is a dispute regarding the right to receive the payment