Rules Regarding Dividend Practices in Nepal


Some legal provisions for dividend payment in the Nepal. Nepal company’s Act 1997 makes these provisions may be seen as- under. Section 2(m) states that bonus share (stock dividend) mean share issued in the form of additional shares to shareholders by capitalizing the surplus from the reserve fund or profit of the company. The term also indicates an increase in the paid up values of the shares after capitalizing the surplus from the reserve fund or the profit of the company. The term also indicates an increase in the paid up values of the shares after capitalizing surplus from the reserve find or the profit of the company. The term also indicates an increase in the paid up values of the shares after capitalizing surplus from the reserve fund or the profit of the company. The term also indicates an increase in the paid up values of the shares after capitalizing surplus or reserve funds.
Section 47 has prohibited company from purchasing, its own share. This section states that no company shall purchase its own shares or supply loans against the security of its own shares.
Section 137 bonus share and subsection (1) states that the company must inform the office before issuing bonus shares. Under subsection (1) this may be done only according to a special resolution passed by the general meeting.
Section 140 dividends and subsequent of this section as follows.
Sub section (1) states that except in the following circumstances, dividends shall be     distributed among the shareholders within 45 days from the date of decision to distributed them.
·         In case of any law forbids the distribution of dividends.
·         In case of the right to dividend is disputed.
·         In case of dividend cannot be distributed within the time limit mentioned above owing, the circumstances beyond any one’s control and without any fault on the part of the company.
Sub section (2)in case dividends are not distributed with the time limit, mentioned in sub section (1) this will be done by adding interest at the prescribed rate sub section (3) states only the person who has registered in the register of existing  shareholders at the time of declaring the dividend shall be entitled to it.

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