The passive dividend is a commitment of capital contribution to the company by one of its partners. That is, it is a future outlay in favor of the company.
This type of dividend occurs in firms that sell their shares in exchange for a partial payment at the beginning. In this way, there is an outstanding balance to be paid, and a disbursement schedule can even be agreed.
In other words, in these cases, a natural or legal person is awarded shares paying only a part of its value. Thus, there is an amount to be amortized in the future, which is called the passive dividend.
Unlike the active dividend , the passive dividend is not an outflow of money from the company. Instead, it is an obligation of the partners towards the company.
Characteristics of the passive dividend
Among the characteristics of the passive dividend include:
- It requires the disbursement of at least 25% of the nominal value of the sharesat the time of purchase.
- The deadline within which the outstanding capital contribution will be carried out must be fixed. This may or may not be monetary (which must be specified).
- To identify investors with outstanding contributions, as long as the passive dividendis not disbursed , the corresponding shares must be registered. These are those where the name of the holder is expressly indicated, and only he can exercise (or endorse in some cases) the rights and obligations as a partner.
Consequences of non-payment of a passive dividend
The consequences of the default or default of a passive dividend are the following:
- The company cannot increase the capital by issuing more shareswhose consideration consists of monetary contributions.
- The debtorloses his political rights. That is, you cannot vote at the general meeting of partners . The amount of your participation will be deducted from the quorum calculation. However, you can still stay informed of the company’s decisions and challenge agreements.
- The member’s economic rights are suspended, so he will not receive active dividends. These will be paid only when the default situation ceases.
- The borrowerloses the pre-emptive subscription right for new shares and convertible bonds .
- The company may require the delinquent partner, through judicial means, the payment of interest and compensation for damages.
- In the event of non-payment of the passive dividend, the company may sell the respective shares, for example, by public auction. Another alternative, if there are no buyers, is the elimination or amortization of the debt in the accounting books, reducing the capital of the company.