# Payment of Dividend & Related Prohibitions
## Mode of Payment
Dividend may be paid in:
- Cash
- Cheque
- Warrant
- Any electronic mode
> Dividend cannot be paid in kind (e.g., goods, assets).
## To Whom Dividend is Paid
Dividend may be paid to:
1. The registered shareholder, or
2. To his order, or
3. To his banker
Important: If a shareholder instructs the company to pay dividend to a particular banker and the company so pays, it is deemed to be made to the shareholder.
## Purchaser of Shares
A purchaser of shares whose name is not registered in the Register of Members cannot claim payment of dividend from the company, even if he has paid the full consideration to the seller.
## Special Provision for Nidhi Companies
For a Nidhi company, where dividend payable in cash is not claimed within 30 days from the date of declaration, the dividend may be paid by crediting the same to the member's account.
## Prohibitions on Declaration of Dividend
### 1. Failure to Repay Deposits (Sections 73 & 74)
A company that fails to comply with Sections 73 and 74 (repayment of deposits accepted before commencement of the Act) — so long as the failure continues — cannot declare any dividend on its equity shares.
### 2. Section 8 Companies
Companies licensed under Section 8 (formation with charitable objects) are prohibited from paying any dividend to members. Their profits must be applied solely in promoting the objects of the company.