Section 182 : Dividend

1) Except in the following circumstance, dividend shall be distributed to the shareholders within forty five days of the decision made to provide dividend:

(a) If any law prohibits the distribution of dividend;

(b) If the right to receive dividend is subject to any dispute;

(c) If, in a circumstance beyond control of the company or for any reason, dividend cannot be distributed within the said time-limit .

2) A company fully or partly owned by the Government of Nepal may distribute dividend only after obtain in prior approval of the Government of Nepal; and the Government of Nepal may give necessary directive on the matter of dividend to be distributed by such company.

3) In the event of failure to distribute a dividend within the tine limit as referred to in Sub-section(1), the dividend shall be distributed together with the interest thereon at such rate as may be prescribed.

4) The person whose name is maintained in the shareholder register at the time of declaration of a dividend or his legal heir shall be entitled to such dividend.

5) A company shall not pay or distribute a dividend in any other manner except out of the amount of profits set aside for the distribution of dividend.

6) Before paying or declaring a dividend out of the profits for any financial year, a company shall have fully deducted the pre operation expenses, the amount required to be depreciated in accordance with the accounting standards fixed by the competent authority under the prevailing law, any amount required to be paid or set aside out of the profits under the prevailing law or the amount or accumulated loss in previous financial years.

Provided, however, that if the prevailing law requires the establishment of a reserve or consolidated fund of any amount prior to distributing dividend, any company which is required to comply with such legal requirement shall not distribute divided without establishing such reserve or consolidated fund.

7) Subject to the various provisions contained in this Section, the board of directors of any company may, in the following circumstance, distribute interim dividend out of the profits for the previous financial year:

(a) where the articles of association contain a provision on the distribution of interim dividend;

(b) where the annual financial statement for the financial year out of the profits of which year interim dividend is to be distributed has already been certified by the auditor and approved by the board of directors.

8) No company shall pay or distribute any amount in cash or kind, chargeable on its funds, to its shareholders, except a dividend approved by the general meeting.

9) The amount of dividend not claimed/received by any shareholder even after the empery of a period of five years after the date of resolution adopted by the company in its general meeting to distribute dividend shall be credited to the investor protection fund to be established under Section 183.

10) In crediting the amount as referred to company shall, prior to the expiry of the period mentioned in that Sub-section, publish a notice in a national daily newspaper inviting the concerned to receive the dividend, within the tie limit of at least on month.

11) A company shall credit the amount of a dividend to be distributed to its shareholders pursuant to this Act to a separate account within forty five days after the date of approval by the general meeting and pay the amount of dividend out of that a account; and the company shall not use such amount for any other purpose.