Section 120, The Companies Act, 2009

In construing the provisions of a company’s articles inrespect of the rights attached to shares, the following rules of construction shall be observed– (a) unless the contrary intention appears, no dividend shall be payable on any shares unless the company resolves to declare such dividend; (b) unless the contrary intention appears, a fixed preferential dividend payable on any class of shares is cumulative, that is to say, no dividend shall be payable on any shares ranking subsequent to them until all the arrears of the fixed dividend have been paid; (c) unless the contrary intention appears, in a winding up arrears of any cumulative preferential dividend, whether earned or declared or not are payable up to the date of actual payment in the winding up; (d) if any class of shares is expressed to have a right to a preferential dividend, then, unless the contrary intention appears, such class has no further right to participate in dividends; Reserve liability of having share Right of a preference shareholder to more than one vote. Construction of class rights. 82 83 (e) if any class of shares is expressed to have preferential rights to payment out of the assets of the company in the event of winding up, then unless the contrary intention appears, such class has no further right to participate in the distribution of assets in the winding up; (f) in determining the rights of the various classes to share in the distribution of the company’s property on a winding up, no regard shall be had, unless the contrary intention appears, to whether or not such property represents accumulated profits or surplus which would have been available for dividend while the company remained a going concern; (g) subject to this section, all shares rank equally in all respects, unless the contrary intention appears in the company’s articles. Numbering of shares