Shares are freely transferable. While giving dividend,how does the co., knows who is holding the shares?

Question

Do the company have anything like address book?

Answer 1

True, shares of public limited company are (generally) freely transferable. To give dividends and other benefits to shareholders like bonus shares, rights shares etc. the companies announce record dates well in advance; as per the requirements of the Companies Act 1956, listing agreements with stock exchanges and SEBI's guidelines. These record dates are available on companies' websites, published in leading newspapers, announced and available with stock exchanges and various other communications of the companies for the benefit of general public. Having notice of record dates, interested shareholders buy/(and)lodge their respective shares in that particular company for transfer in their names for availing the declared dividends and other benefits. Those who don't do so loose such benfits.

And for the companies concerned, they stand discharged from their legal obligations to pay such dividends etc to those whose names stand in the books of the company as on the record date.

Such books carrying names and other legal required details of the  sharesholders/members are called Members' Registers which are (normally) supposed to be kept at the Registered Office of the Company and are open to shareholders/members/public inspection on all workings days with reasonable restrictions, already announced/prescribed in the Articles of Association of the Company concerned.