(1) A company may pay dividends by issuing new shares by a resolution adopted at a general meeting of shareholders: Provided, That such stock dividends may not exceed the amount equivalent to half of the total amount of dividends.
(2) Dividends under paragraph (1) shall be paid based on the par value of shares and if the company have issued different classes of shares, dividends may be paid in the same classes of shares, respectively. <Amended by Act No. 5053, Dec. 29, 1995; Act No. 10600, Apr. 14, 2011>
(3) The provisions of Article 443 (1) shall apply mutatis mutandis where, out of profits to be distributed as stock dividends, a fraction remains which is less than the par value of a share. <Amended by Act No. 5053, Dec. 29, 1995>
(4) A shareholder who has received stock dividends shall become a shareholder of new shares from the time of closing of the general meeting of shareholders at which a resolution mentioned in paragraph (1) is adopted. In such cases, the latter part of Article 350 (3) shall apply mutatis mutandis. <Amended by Act No. 5053, Dec. 29, 1995>
(5) Where a resolution under paragraph (1) has been adopted, directors shall notify, without delay, the shareholders entitled to receive the stock dividends and the pledgees entered on the register of shareholders, of the classes and number of shares to be allocated to the shareholders. <Amended by Act No. 12591, May 20, 2014>
(6) The right of a pledgee under Article 340 (1) shall extend to shares to be distributed to a shareholder pursuant to paragraph (1). In such cases, the provisions of Article 340 (3) shall apply mutatis mutandis.[This Article Newly Inserted by Act No. 3724, Apr. 10, 1984]