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About General Reserve

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(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
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Bhaskaran Chackrapani Warrier

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Bhaskaran Chackrapani Warrier (Expert)
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.
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Kedar Pande

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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.
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Bhaskaran Chackrapani Warrier

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Bhaskaran Chackrapani Warrier (Expert)
21 May 2009 Pl go to the link https://www.mca.gov.in/MinistryWebsite/dca/actsbills/rules/CToPtRR1975.pdf
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