RE: Google, Can a divi be cancelled once declared16 Jun 2023 16:18
It is possible for a company to suspend the payment of dividends (ie to decide not to pay them for a time), as a company is not obliged to pay dividends. It is also possible for a company to cancel a dividend (ie not pay a dividend that it had already indicated that it intended to pay), although if and when a company can cancel a dividend will depend on whether it is a final dividend or an interim dividend.
Once a final dividend is declared (ie approved by the shareholders) it becomes a debt that is immediately due from the company to its shareholders, unless the terms of an approving resolution provide for it to be payable at a future date, in which case it becomes a debt due only on that date. Once a final dividend has become a debt due, its payment can be enforced, meaning that the shareholders have a right to sue for that debt, if the dividend is cancelled.
In contrast, the payment of an interim dividend is a decision of the directors and no debt due from the company to its shareholders is created at the time that decision is made, so an interim dividend can be cancelled at any time up to its payment. A shareholder’s right to an interim dividend does not arise until the dividend is actually paid