Can a shareholder order company to pay his dividend to some other person

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Yes, a shareholder can typically direct a company to pay their dividend to another person. This is possible if the shareholder provides the company with a formal mandate or instruction in favour of the intended recipient. Company law, such as Section 123(5) of the Companies Act, allows for dividend payments to be made 'to the order of the shareholder', and guidance notes further support payment to a mandatee.

Ashi Jain

Ashi Jain (Querist)

22 February 2025 As per law, can a shareholder order company to pay his dividend to some other person

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

22 February 2025 If you wish to divert your tax liability to third person, that is not feasible, as TDS will be deducted from shareholders PAN.

Nikhil Kaushik

Nikhil Kaushik (Expert)

22 February 2025 yes. the dividend can be paid to another person if the shareholder has given to the company a mandate in favor of that person. section 123(5) of the companies act provide for "to the order of the shareholder" as an option for payment of dividend.

you may also refer to page 21 of the ICSI Guidance note on Dividend

Dividend payment to the mandatee
If a Member has given a mandate, Dividend should be paid to the person in
whose favour the mandate has been given.

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