I dont know about practicle approach., but as far I learned, there is not need to comply with Companies (Decleration of Dividend Out of Reserve) Rules in case of decleration of Dividend out of accumulated profits.. In that case, only Sec 205(2A) has to comply and other procedural requirement...
But in case of decleration out of RESERVE, then there is need to comply with these Rules....
So answer to your query will be as below :-
1) Can anybody provide checklist in case of declaration of dividend out of accumulated profits (i.e surplus profits not transferred to reserves.) -
- Yes, Only need is to transfer appropriate %age of Profit to Reserve as per Sec 205(2A)
2) will the rules of declaration of dividend out of reserves apply in this case -
- No. These rules are applicable only in case of Div our of RESERVE
3) Should the Company transfer profit to reserves out of that accumulated previous year(s)profits as per transfer of profit to reserves rules -
- There is no specification whether transfer has to be made out of previous year profits or Current Year Profits..., but it doesnt make any difference, becasue, both are treated as distributable profits and so no need to segrigate them..
4) will the company have to pay dividend tax out of accumulated previous year(s) profit.
- Here also, it is not spefic which profit has to be utilised for payment of Divdend Distribution tax. But also it doesnt make any difference becasue it is a below the line item and not considerable as Expenses and deducted out of Accumulated Profit (ie CY + PY)
Above are my views and all are based on provisions. I have no idea about relevent case laws.. so experts opinions are invited...