About General Reserve
This query is : Resolved
Amit Deokule
(Querist)
21 May 2009
Dear All,
Whenever any pvt. company makes profit and if it is distributing dividend to its director, then is it mandatory to transfer some portion of profit to General Reserve and how much? OR in geeral I would like to know that treatment given to General Reserve in case of PRofit making company?
Thanks in anticipation,
Amit
Whenever any pvt. company makes profit and if it is distributing dividend to its director, then is it mandatory to transfer some portion of profit to General Reserve and how much? OR in geeral I would like to know that treatment given to General Reserve in case of PRofit making company?
Thanks in anticipation,
Amit
21 May 2009
Certain percentage of the profits has necessarily to be transferred to reserves before declaring dividends. For details of the % pl look in The Companies (Transfer of Profits to Reserves) Rules,1975 particularly clause 2 and 3.
Kedar Pande
(Expert)
21 May 2009
Mr Chakrapaniji, can you please give a link to the Rules you mentioned or can you please mention the percentages for ready reference.
21 May 2009
Pl go to the link https://www.mca.gov.in/MinistryWebsite/dca/actsbills/rules/CToPtRR1975.pdf
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