93.

Payment of dividend in proportion to amount paid-up A company may, if so authorised by its articles, pay dividends in proportion to the amount paid-up on each share.

205.

Dividend to be paid only out of profits. (1) No dividend shall be declared or paid by a company for any year except out of profits for that year arrived at after depreciation or (2) Out of profits of previous years arrived at after depreciation and remaining undistributed (3) Out of both or moneys provided by CG or SG in pursuance of a guarantee given by them Provided that (a) If it has not provided depreciation for any period, then it shall before declaring or paying dividend for any year provide depreciation out of profits of that year or any previous year (b) If it has incurred loss in any previous year, then loss or depreciation for that year whichever is less, shall be set off against profits for the year for which dividend is proposed or against profits for any previous year, arrived at in both cases after depreciation or against both; (c) CG may, if it thinks in public interest, allow any company to declare or pay dividend for any year out of profits for that year or any previous year without depreciation: (1A) BOD may declare interim dividend and it shall deposit in a separate bank account dividend including interim dividend within 5 days from declaration. The Company shall use it for payment of interim dividend. The provisions for dividend, as far as may be, also apply to any interim dividend. Depreciation shall be provided either (a) (b) To the extent specified in section 350; or In respect of each item of depreciable asset, for such an amount as is arrived at by dividing 95% of original cost by the specified period in respect of such asset; or on any other basis approved by CG which has the effect of (b) above or For other depreciable asset for which no rate has been laid down, on such basis approved by CG by any general order published in Official Gazette or by any special order in any particular case:

(1B) (1C) (2)

(c) (d)

(2A)

No dividend shall be declared or paid by a company for any financial year out of profits for that year arrived at after depreciation, except after transfer to reserves, not exceeding 10% Higher percentage of its profits transferred to the reserves is allowed by CG

(2B)

A company which fails to comply with Sec 80A shall not, so long as such failure continues, declare any dividend on its equity shares.] No dividend shall be payable except in cash: Nothing in this section shall affect sec 208. For the purposes of this section (b) Dividend may be paid by cheque or warrant sent through post to registered address of shareholder entitled or in case of joint shareholders, to one of the joint shareholders first named on register of members, or to such person they may in writing direct.]

(3) (4) (5)

205A. Unpaid dividend to be transferred to special dividend account. (1) A dividend has been declared but has not been paid or claimed within 30 from declaration, to any shareholder entitled, company shall, within 7 days from its expiry, transfer such dividend to a special account to be opened in any scheduled bank, to be called Unpaid Dividend Account of ............ Company Limited/Company (Private) Limited. (2) Where, owing to inadequacy or absence of profits in any year, any company proposes to declare dividend out of the accumulated profits earned by in previous years and transferred by it to the reserves, such declaration shall not be made except as per rules made by CG, and, if not in accordance with such rules, it shall not be made except with previous approval of CG. (3) Interest on amount not transferred to that account, at 12% p.a. and interest accruing shall ensure to benefit of members of the company in proportion to the amount remaining unpaid to them. (4) Any money transferred to that account which remains unpaid or unclaimed for 7 years from date of transfer shall be transferred to the Fund established u/s 205C (1). (5) It shall furnish to such authority or committee as CG may appoint a statement in the prescribed form setting forth in respect of all sum included in such transfer, the nature of the sums, the names and last known addresses of the person entitled to receive the sum, the amount to which each person is entitled and the nature of his claim thereto and others. (6) The company shall be entitled to a receipt for that and such a receipt shall be an effectual discharge of the company in respect thereof.] (7) If a company fails to comply, then the company and every officer who is in default shall be punishable with fine up to ` 5000 for every day during which the failure continues.] 205B. Payment of unpaid or unclaimed dividend Any person claiming to be entitled to any money transferred may apply to CG for payment; and the Central Government may, if satisfied, make an order for the payment: Doesnt apply to any person claiming to be entitled to any money transferred to Fund on and after Companies (Amendment) Act, 1999

206.

Dividend not to be paid except to registered shareholders or to their order or to their bankers. (1) No dividend shall be paid by a company in respect of any share therein, except (a) To the registered holder of such share or to his order or to his bankers; or (b) In case a share warrant has been issued in respect of the share in pursuance of section 114, to the bearer of such warrant or to his bankers. (2) Nothing shall be deemed to require the bankers of a registered shareholder to make a separate application to the company for the payment of the dividend.

206A. Right to dividend, rights & bonus shares to be held in abeyance pending registration of transfer Where any instrument of transfer has been delivered to any company for registration and the transfer has not been registered, then (a) Transfer dividend for such shares to special account unless the company is authorised by the registered holder in writing to pay such dividend to transferee specified in such instrument; and (b) Keep in abeyance rights shares and any issue of fully paid-up bonus shares. 207. Penalty for failure to distribute dividends within thirty days. Where a dividend has been declared by a company but has not been paid, to any shareholder entitled, every director of the company shall, if he is knowingly a party to default, be punishable with simple imprisonment for up to 3 years & a fine of ` 1000 for every day it continues & SI at 18% p.a. till it continues: Provided that no offence shall be deemed to have been committed if: (a) Where the dividend could not be paid by reason of the operation of any law; (b) Where a shareholder has given directions regarding payment which cannot be complied with; (c) Where there is a dispute regarding the right to receive the dividend; (d) Where dividend has been lawfully adjusted against any sum due to it from the shareholder; or (e) It was not due to any default on the part of the company. 555. Unpaid dividends & undistributed assets to be paid into the Companies Liquidation Account. (1) If the liquidator has under his control any money representing (a) Dividends payable to any creditor which had remained un-paid for 6 months after date of declaration, or (2) The liquidator shall, on dissolution, similarly pay into the said account any money representing unpaid dividends or undistributed assets in his hands at the date of dissolution.