Declaration and Payment of Dividend (under the provisions of Companies Act 2013)

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  • Last Updated on 25 January, 2022

Declaration and payment of dividend; Companies Act 2013

[2022] 134 227 (Article)

1. Dividend

The origin of the word “Dividend” is derived from the Latin word “Dividendum” which means a thing to be divided. The simple meaning of dividend is that a portion of the profit received by the shareholders of a company from the company’s net profit – which is legally available by way of surplus for the distribution amongst the shareholders of the company. In light of this, we could state that the dividend is nothing but a return on the share capital subscribed for and paid to the shareholders by a company.

Recipient of dividend – Dividend is paid only to the registered shareholder of such share or to his order or to his banker. Time limit for payment of dividend – The time limit for payment of dividend is thirty days from the date of its declaration of dividend.

2. Provisions of Companies Act 2013 relating to dividend

The following are the provisions under the Companies Act 2013 in relation to dividend.

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