History of Dividend in Timeline

By Popular Timelines Editorial Team · Updated: July 14, 2026

A dividend is a portion of a company's earnings distributed to its shareholders, typically determined by the company's board of directors. These payments represent a way for corporations to share their financial success with investors. Dividends are most commonly issued as cash payments, though they can also be distributed as additional stock shares or other property. For investors, dividends serve as a source of regular passive income and are often viewed as a sign of a company's financial stability and profitability. While companies are not legally obligated to pay dividends, established firms in mature industries frequently maintain consistent payout schedules. The dividend yield, calculated as the annual dividend per share divided by the stock's current price, is a key metric investors use to assess the return on their investment. Once declared, the dividend becomes a liability for the company until it is paid out on the designated date.

1902: Establishment of the Principle of Non-Interference in Dividend Policy

In 1902, the principle that courts should not interfere with corporate dividend policies was established through the rulings in the Canadian case of Burland v Earle and the British case of Bond v Barrow Haematite Steel Co.

1912: Miles v Sydney Meat-Preserving Co Ltd

The Australian case of Miles v Sydney Meat-Preserving Co Ltd, decided in 1912, reinforced the common law principle that directors maintain wide discretion regarding the declaration or payment of dividends.

1934: Publication of Securities Analysis by Benjamin Graham and David Dodd

In 1934, authors Benjamin Graham and David Dodd published their influential work, Securities Analysis, in which they asserted that the primary objective of a business corporation is to provide dividends to its owners, and defined a successful company as one that can sustain and grow its dividend payments over time.

2001: Corporate Dividend Rates in India

In 2001, dividend-paying firms in India represented 24 percent of the market, serving as the starting point for a period of fluctuation in corporate dividend distribution.

2006: Enactment of the Companies Act 2006

In 2006, the Companies Act 2006 was enacted, introducing specific rules under Part 23 (sections 829–853) that govern how companies distribute assets and dividends to shareholders, mandating that such distributions must be made from accumulated, realized profits.

2009: Decline in Dividend-Paying Firms

By 2009, the percentage of companies in India distributing dividends dropped to approximately 19 percent, marking a significant decrease from the levels observed earlier in the decade.

2010: Stabilization of Dividend Distribution

In 2010, the trend of dividend distribution saw a slight shift, with the percentage of dividend-paying firms in India rising to reach 19 percent.

2013: Sumiseki Materials Co Ltd v Wambo Coal Pty Ltd

In 2013, the Supreme Court of New South Wales diverged from long-standing precedent in Sumiseki Materials Co Ltd v Wambo Coal Pty Ltd by recognizing a shareholder's specific contractual right to receive a dividend.

April 2016: Introduction of Dividend Income Tax Threshold

Beginning in April 2016, a new tax regulation in India mandated that dividend income exceeding ₹1,000,000 would be subject to a 10 percent dividend tax for the shareholder.

2018: England and Wales Court of Appeal Ruling on Global Corporate Ltd v Hale

In 2018, the England and Wales Court of Appeal issued a ruling in the case of Global Corporate Ltd v Hale (EWCA Civ 2618) which clarified laws regarding dividend payments. The court overturned a previous High Court decision, determining that specific payments made to a director/shareholder were legally dividends rather than quantum meruit payments for services, even though the company had entered liquidation.

2018: UK Government Dividend Policy Review

In 2018, the United Kingdom government initiated a review of dividend distribution regulations following consultations on corporate governance and insolvency. The primary goal of this 2018 initiative was to prevent financially distressed companies from issuing substantial dividends to shareholders and to mandate that large corporations publicly disclose their distribution policy statements.

2020: Abolition of Dividend Distribution Tax

As part of the Budget 2020–2021, the Indian government abolished the Dividend Distribution Tax (DDT), shifting the tax burden directly to the investor.

2021: New Dividend Taxation Framework

Following the Budget 2020–2021, the government implemented a policy in 2021 where dividend income is taxed based on the specific income tax slab rates of the individual investor.