Dividends pro rata as to nominal paid up capital
The articles of association of a limited company provided that ‘the directors may, with the sanction of the company in general meeting, declare a dividend to be paid to the members in proportion to their shares.’ The articles also provided that ‘capital’ should mean ‘the capital for the time being of the company,’ and ‘shares’ the ‘shares into which the capital is divided.’ The capital consisted of 60,000 shares of pounds 1 each. Two-thirds of the shares were fully paid-up, and on the remaining third only 5s. per share had been paid.
Held: (aff. judgment of First Division) that under the terms of the articles of association dividends were to be paid in proportion to the nominal, and not in proportion to the paid-up capital held by each member.
Lord Chancellor, Lords Blackburn, Watson, Bramwell, and Fitzgerald
 UKHL 244, 20 SLR 244
Updated: 20 November 2021; Ref: scu.637747