(1) Dividends should be distributed to the shareholders within forty-five days of the decision to give dividends, except in the following cases:-
(a) If any law prohibits the distribution of dividends,
(b) If the right to receive dividend is disputed,
(c) If the dividend cannot be distributed within that period due to circumstances beyond the company's control or for any reason.
(2) A company wholly or partially owned by the Government of Nepal may distribute dividends only with the prior approval of the Government of Nepal, and the Government of Nepal may issue necessary instructions regarding dividends to be distributed by such companies.
(3) If the dividend is not distributed within the period of sub-section (1), then the dividend shall be distributed after adding the prescribed interest.
(4) At the time of declaration of dividend, the person whose name is registered in the shareholder's register book or the person entitled according to the law shall be entitled to such dividend.
(5) The company shall not be able to pay or distribute dividends in any other way except from the amount of profit allocated for distribution of dividends.
(6) Before the payment or distribution of dividends from the company's profit in a financial year, pre-operational expenses, the amount to be deducted according to the accounting value determined by the authorized body according to the prevailing law, the amount to be paid or set aside from the profit according to the prevailing law, or the accumulated in previous financial years. The amount of loss should be fully deducted. However, if the prevailing law has made any provision regarding the need to set up a reserve or reserve fund before distributing the dividend, the company that has to follow such provision cannot distribute the dividend without setting up such reserve or reserve fund.
(7) The board of directors of a company subject to the various provisions made in this section may distribute interim dividends from the profits of the previous financial year in the following cases:-
(a) If provision is made in the regulations regarding distribution of interim dividend,
(b) which distributes interim dividends out of the profits of the financial yearYes, if the annual financial statement of that financial year has been verified by the auditor and approved by the board of directors.
(8) Apart from the dividend approved by the general meeting, the company cannot pay or distribute any amount to the shareholders in the form of cash or in kind, which will incur expenses in its fund.
(9) Even after the expiry of the period of five years from the date of the decision of the general meeting of the company on the distribution of dividends, any shareholder shall deposit the amount of unclaimed dividends in the investor protection fund established in accordance with section 183.
(10) When a company deposits the amount as per sub-section (9) into the fund as per section 183, it shall publish a notice in a national level daily newspaper at least one month before the end of the period mentioned in that sub-section. (11) The amount of dividend to be distributed to shareholders according to this Act Within forty-five days from the date of approval by the general meeting, the company has to pay the amount of dividend from the same account by depositing it in a separate account and the company is not allowed to use such amount for other work.