PENALTY FOR NON-PAYMENT OF DIVIDEND

Penalty for non-payment of dividend after declaration:

                                               

                                                                Dividend when declared it becomes liability of a company to pay dividend to registered shareholder. It is the duty of company to pay dividend within 30 days from the date of declaration. If the company fails to pay dividend every officer who is willing to default shall be punishable with the following penalty. Penalty is consisting of imprisonment and monetary penalty. Every officer who is willful default shall be imprisoned upto two years and one thousand rupees per day during which such failure continue. Moreover the company has to pay interest 18% per annum on the due amount.  

following are the exception to the general rule which means although dividend is not paid penalty provision will not imposed. these are stated below:

   1. dividend is not paid due to operation of law.
   2. where shareholder has given direction for payment of dividend and non-complience has been communicated to the shareholder.
   3. where there is dispute regarding the right to receive the dividend.
   4. where dividend lawfully adjusted by the company aganist any sum due to it from the shareholder.
   5. where other reasons the failure to pay dividend is not default on the part of the company.