When dividend is declared it become a liability of the firm the distribution procedure therefore starts from declaration. Necessary for the board of director to adopt a resolution declaring that a particular rate of dividend will be paid to shareholders this resolution require approval of the share holder in the Annual General Meeting generally the resolution of the board include the following folder off the record date rate or amount to be paid rate of payment and the medium of payment firstly they both authorised that only those shareholders whose name appear on the record book on a particular date are entitled to receive the dividend in India section 206 of companies act provides that the dividend is not to be paid accept to registered shareholder or to their order or to their banking in case of the share warrant however the devil may be paid to the behaviour of the warrant or to his banquet secondly the rate of the amount of dividend should be a specified is specified in the revolution it is important that provision for dividend to be declared should be made in the account of the year in this connection it may be mentioned that there may be number of basic Dividend policy is that may be followed by the farm thirdly the announcement should also specify the date on which are the period which the dividend is payable in India cash dividend should be payable within the period of 42 days from the date of declaration in the fault of which will attract penalty is specified in section 207 lastly the medium of payment cash or share should also be specified
