History of Dividend in Timeline

A dividend represents a portion of a company's profits distributed to its shareholders. These payments are typically made from the company's current earnings or accumulated retained earnings. While dividends are often paid in cash, they can also be distributed as additional shares through dividend reinvestment plans, share repurchases, or, in some cases, through the distribution of assets. Companies are generally restricted from paying dividends using their capital, ensuring that dividends are derived from profits.

1902: Burland v Earle and Bond v Barrow Haematite Steel Co

In 1902, the principle of non-interference in companies' dividend policies was established in the Canadian case of Burland v Earle and the British case of Bond v Barrow Haematite Steel Co, giving directors wide discretion.

1912: Miles v Sydney Meat-Preserving Co Ltd

In 1912, the principle of non-interference in companies' dividend policies was further reinforced by the Australian case of Miles v Sydney Meat-Preserving Co Ltd.

1934: Securities Analysis

In 1934, Benjamin Graham and David Dodd wrote in Securities Analysis: "The prime purpose of a business corporation is to pay dividends to its owners. A successful company is one that can pay dividends regularly and presumably increase the rate as time goes on."

2001: Dividend-paying firms in India

In 2001, the percentage of dividend-paying firms in India was 24 percent.

2006: Companies Act 2006

In 2006, Part 23 of the Companies Act 2006 (sections 829–853) was introduced in the UK which governs the payment of dividends to shareholders, referring to any distribution of a company's assets to its members.

2009: Dividend-paying firms in India

In 2009, the percentage of dividend-paying firms in India fell to almost 19 percent.

2010: Dividend-paying firms in India

In 2010, the percentage of dividend-paying firms in India rose to 19 percent.

2013: Sumiseki Materials Co Ltd v Wambo Coal Pty Ltd

In 2013, the Supreme Court of New South Wales, in the case of Sumiseki Materials Co Ltd v Wambo Coal Pty Ltd, broke precedent by recognizing the shareholder's contractual right to a dividend.

April 2016: Dividend tax in India

Starting from April 2016, dividend income over ₹1,000,000 attracted a 10 percent dividend tax in the hands of the shareholder in India.

2018: Global Corporate Ltd v Hale

In 2018, the England and Wales Court of Appeal clarified the law regarding dividend payment in the case of Global Corporate Ltd v Hale [2018] EWCA Civ 2618, reclassifying certain payments to a director/shareholder as dividends.

2018: UK Government Review of Dividend Rules

In 2018, the United Kingdom government announced it was considering a review of existing rules on dividend distribution following a consultation exercise, aiming to address concerns about companies in financial distress distributing "significant dividends".