To help out for understanding the dividends and what if Punishment for failure to distribute the dividends. To provide a knowledge of possibilities for failure of distribution of dividends. THANK YOU :)

1. Punishment for failure to
distribution the dividends.
Presented By:-
 SHUBHAM KHURANA
 UJJWAL PANDEY
 SPARSH GUPTA

2. Introduction:-
DIVIDENDS is payment made by a corporation to its
shareholders, usually as a distribution of profits.
When a corporation is earns a profit or surplus, the
corporation is able to re-invest the profit in the
business and pay a proportion of the profit as a
dividend to shareholder.

3. PUNISHMENT FOR FAILURE TO
DISTRIBUTION THE DIVIDENDS.
A dividend has been declared by a company
but has not been paid or the warrant in
respect thereof has not been posted within
thirty days from the date of declaration to
any shareholder entitled to the payment of
the dividend.

4. According to section 127 of CA 2013, where a dividend has been declared by a company but has
not been paid or the warrant in respect thereof has not been posted within thirty days form the
date of declaration to any shareholder entitled to the payment of the dividend:
1) Two Years Jail to Directors:
Every director of the company shall, if he is knowingly a party to the default, be punishable
with imprisonment which may extend to two years.
2) At least 1,000 rupees fine to Directors:
Such directors shall also be liable to pay fine not less than 1,000 rupees for every day during
which such default continues.

5. A company may declare its dividend in compliance with the provisions of section 123 of the
companies Act, 2013 with effect from first day of April, 2013. Therefore, such declared
dividend must be paid within 30 days from the date of its declaration to all shareholders
entitled to the payment of the dividend.
3) 18% Interest on unpaid Dividend:
The company shall be liable to pay simple interest at the rate of 18% p.a. during the period
for which such default continues. However, the following are the exceptions provided under
section 127 of CA 2013 under which no offence shall be deemed to have been committed:

6. Where the dividend has been lawfully adjusted by company
against and sum due to it from the shareholder.
Where there is dispute regarding the right to receive the
dividend.
Where a shareholder has given directions to the company
nnnn regarding the payment of the dividend and those directions
knnn cannot be complied with and same has been communicated
to him.
Where the dividend could not be paid by reason of the
operation of any law.
Operation of Law
Shareholders Directions
Dividend Rights
Dividend Adjustment