Legal Definitions - informal dividend

An informal dividend is a payment made to a shareholder that is not officially declared as a dividend by the company. This can include payments of salary, rent, or interest that are given to a shareholder instead of a dividend. It is also known as a disguised dividend.

For example, if a company decides not to declare a dividend but instead pays its shareholders a bonus, that bonus would be considered an informal dividend. This payment is not subject to the same regulations and taxes as an official dividend.