Important differences between Interim dividend and Final dividend
An interim dividend differs from a final dividend in the following respects:
2. An interim dividend is declared before the preparation of the final accounts. A final dividend, on the other hand, can be declared only after the accounts are prepared and the profit is ascertained.
3. Interim dividend relates to a part of the year (i.e.,) usually six months. A final dividend relates to the full year.
4. The Board can declare an interim dividend only when the Articles expressly permit a declaration. There need not be any express provision in the Articles for declaring a final dividend. It is an inherent right of the shareholders.
5. An interim dividend once declared shall not become a debt due from the company to the shareholders. While a final dividend, once declared, shall become a debt due from the company.
6. The directors are also empowered to cancel the declaration of the interim dividend after it is declared. The shareholders, once declared a final dividend, cannot cancel the declaration.