5. DIVIDEND AND RESERVE

 

Section 1200.- The distribution of dividend must be made in proportion to the amount paid upon each share, unless otherwise decided with regard to preference shares.

 

Section 1201.- No dividend may be declared except by a resolution passed in general meeting.

The directors may from time to time pay to the shareholders such interim dividends as appeared to the directors to be justified by the profits of the company.

No dividend shall be paid otherwise than out of profits. If the company has incurred losses, no dividend may be paid unless such losses have been made good.

 

Section 1202.- The company must appropriate to a reserve fund, at each distribution of dividend, at least one-twentieth of the profits arising from the business of the company, until the reserve fund reaches one-tenth part of the capital of the company or such higher proportion thereof as may be stipulated in the regulations of the company.

If shares have been issued at a value higher than the face value, the excess must be added to the reserve fund until the latter has reached the amount mentioned in the foregoing paragraph.

 

Section 1203.- If dividend has been paid contrary to the provisions of the last two preceding Sections, the directors of the company are entitled to have the amount so distributed returned to the company, provided that a shareholder cannot be obliged to return dividend which he has received in good faith.

 

Section 1204.- Notice of any dividend that may have been declared shall be either published twice at least in a local newspaper or given by letter to each shareholder whose name appears on the register of shareholders.

 

Section 1205.- No dividend can bear interest against the company.

 

6. BOOKS AND ACCOUNTS

 

Section 1206.- The directors must cause true accounts to be kept :

                  (1) Of the sums received and expended by the company and of the matters in respect of which each receipt or expenditure takes place ;

                  (2) Of the assets and liabilities of the company.

 

Section 1207.- The directors must cause minutes of all proceedings and resolutions of meetings of shareholders and directors to be duly entered in the books which shall be kept at the registered office of the company. Any such minutes signed by the chairman of the meeting at which such resolutions were passed or proceedings had, or by the chairman of the next succeeding meeting, are presumed correct evidence of the matters therein contained, and all resolutions and proceedings of which minutes have been so made are presumed to have been duly passed.

Any shareholder may at any time during business hours demand an inspection of the above mentioned documents.