Difference between dividend & deemed dividend

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

27 December 2014 As I do self study that's why some points I can't get easily one of which is below, What is deemed dividend. what's exzet Difference dividend & deemed dividend.

Guest

Guest (Expert)

27 December 2014 Dividend means actual dividend which company declares in the AGM and include interim dividend..But deemed dividend is when a company gives advance or assets or loans to an individual having substantial interest in the company then such advance or loan or valus of such assets is deemed to be the dividend upto to the accumulated profits.

Querist : Anonymous

Querist : Anonymous (Querist)

27 December 2014 Thanks Rachit, Company distributes dividend out of acculamated profit or after selling its asset if company is with short of amount ?

Guest

Guest (Expert)

27 December 2014 No company cannot distribute dividend by selling the assets of the company..Dividend can be distributed from the current year profits.It can also be paid out of the accumulated profits subjects to some conditions..

Querist : Anonymous

Querist : Anonymous (Querist)

27 December 2014 Accumalated profit means, profit available to the company at the time of distribution of dividend, doesn't ? I am forgetting one thing which I read in book, tomorrow I will ask.....it might be written that company distributes dividend after capitalized its assets....