Company law - dividend
This query is : Resolved
16 October 2012
please provide all the details of pvt limited -
how to give dividend
how to provide
resolution for dividend
and other details.
how to give dividend
how to provide
resolution for dividend
and other details.
17 October 2012
Hi
Specimen of Board resolutions
I. Recommendation of dividend on shares
The Chairman proposed to the Board to recommend to the shareholders a dividend @ Re. 0.20 per share (i.e. 2%) on 50,76,966 equity shares of Rs. 10 each fully paid up. The Board discussed the proposal and passed the following resolution:
RESOLVED THAT a dividend @ Re. 0.20 per share (i.e. 2%) out of the profits of the financial year ending on 31st March, 2006 on 50,76,966 of Rs.10 each full paid up aggregating to Rs. 10,15,395 be recommended to the shareholders for declaration in the ensuing Annual General Meeting of the Company.
II. Determination of Book closure dates
The Chairman informed the Board that the Company is required to close its register of members and share transfer register for the purpose of Annual General Meeting and declaration of dividend.
He proposed to close those books/registers from 13th September, 2006 to 30th September, 2006 (both days inclusive). The Board discussed the matter and passed the following resolution:
RESOLVED THAT the Register of members and Register of share transfers of the Company be closed from 13th September to 30th September, 2006 (both days inclusive) for the purpose of Annual General Meeting and declaration of dividend pursuant to the Listing Agreement of the Company with the Stock Exchange(s) and as per section 154 of the Companies Act, 1956, and that the book closure dates be published in the news papers and be intimated to the Stock Exchange(s) in compliance of the Listing Agreement.
III. Authority to open a special dividend bank a/c with the Bank
The Chairman informed the Board about the requirement for payment of dividend for the year 2005-06 @ 2%, for which the Company is required to open a Special Bank Account with the Dena Bank, Sitla Mata Bazar Branch, Indore to deposit the entire amount of the dividend payable Rs. 10,15,394 to the equity shareholders of the Company. The Board considered and after due discussion passed the following resolution unanimously:
RESOLVED THAT a Special Principal Account under the name and style of 'NP LTD. DIVIDEND PAYABLE ACCOUNT-2004-05' be opened with the Dena Bank, Sitla Mata Bazar Branch, Indore and a sum of Rs. 10,15,394 (Rs. Ten Lacs Fifteen Thousand Three Hundred and Ninety Four Only) be deposited into the said bank account to make payment of dividend to the equity share holders of the Company for the year 2005-06 and Shri JPA, the Managing Director and/or Shri AS, the Share Executive of the Company be and are hereby severally authorised to sign the necessary forms and documents for the purpose of the opening of the said bank account for and on behalf of the Company.
RESOLVED FURTHER THAT the Bank be instructed to pay the amount of dividend to the shareholders as may be advised by the Company by way of issuance of cheques/Demand Drafts/Pay orders as may be instructed and or signed by severally Shri JPA, the Managing Director and/or Shri AS, the Share Executive of the Company.
RESOLVED FURTHER THAT Shri JPA, the Managing Director and/or Shri AS, the Share Executive of the Company be and are hereby severally authorised to operate the account and to issue cheques and to give any instructions relating to the operation of the above said bank account and their signature(s) shall be the sufficient authority to bind the Company in all transactions between the Bank and the Company including those specifically referred to herein.
RESOLVED FURTHER THAT Shri JPA, the Managing Director of the Company be and is hereby authorised to furnish a certified copy of the above said resolution, Memorandum and Articles of Association of the Company and specimen signatures of the above said signatories for and on behalf of the Company and be informed from time to time by a notice in writing under the hand of the Chairman of any changes which may take place therein and be entitled to act upon such notice until the receipt of further notice under the hand of the Chairman.
Specimen of Board resolutions
I. Recommendation of dividend on shares
The Chairman proposed to the Board to recommend to the shareholders a dividend @ Re. 0.20 per share (i.e. 2%) on 50,76,966 equity shares of Rs. 10 each fully paid up. The Board discussed the proposal and passed the following resolution:
RESOLVED THAT a dividend @ Re. 0.20 per share (i.e. 2%) out of the profits of the financial year ending on 31st March, 2006 on 50,76,966 of Rs.10 each full paid up aggregating to Rs. 10,15,395 be recommended to the shareholders for declaration in the ensuing Annual General Meeting of the Company.
II. Determination of Book closure dates
The Chairman informed the Board that the Company is required to close its register of members and share transfer register for the purpose of Annual General Meeting and declaration of dividend.
He proposed to close those books/registers from 13th September, 2006 to 30th September, 2006 (both days inclusive). The Board discussed the matter and passed the following resolution:
RESOLVED THAT the Register of members and Register of share transfers of the Company be closed from 13th September to 30th September, 2006 (both days inclusive) for the purpose of Annual General Meeting and declaration of dividend pursuant to the Listing Agreement of the Company with the Stock Exchange(s) and as per section 154 of the Companies Act, 1956, and that the book closure dates be published in the news papers and be intimated to the Stock Exchange(s) in compliance of the Listing Agreement.
III. Authority to open a special dividend bank a/c with the Bank
The Chairman informed the Board about the requirement for payment of dividend for the year 2005-06 @ 2%, for which the Company is required to open a Special Bank Account with the Dena Bank, Sitla Mata Bazar Branch, Indore to deposit the entire amount of the dividend payable Rs. 10,15,394 to the equity shareholders of the Company. The Board considered and after due discussion passed the following resolution unanimously:
RESOLVED THAT a Special Principal Account under the name and style of 'NP LTD. DIVIDEND PAYABLE ACCOUNT-2004-05' be opened with the Dena Bank, Sitla Mata Bazar Branch, Indore and a sum of Rs. 10,15,394 (Rs. Ten Lacs Fifteen Thousand Three Hundred and Ninety Four Only) be deposited into the said bank account to make payment of dividend to the equity share holders of the Company for the year 2005-06 and Shri JPA, the Managing Director and/or Shri AS, the Share Executive of the Company be and are hereby severally authorised to sign the necessary forms and documents for the purpose of the opening of the said bank account for and on behalf of the Company.
RESOLVED FURTHER THAT the Bank be instructed to pay the amount of dividend to the shareholders as may be advised by the Company by way of issuance of cheques/Demand Drafts/Pay orders as may be instructed and or signed by severally Shri JPA, the Managing Director and/or Shri AS, the Share Executive of the Company.
RESOLVED FURTHER THAT Shri JPA, the Managing Director and/or Shri AS, the Share Executive of the Company be and are hereby severally authorised to operate the account and to issue cheques and to give any instructions relating to the operation of the above said bank account and their signature(s) shall be the sufficient authority to bind the Company in all transactions between the Bank and the Company including those specifically referred to herein.
RESOLVED FURTHER THAT Shri JPA, the Managing Director of the Company be and is hereby authorised to furnish a certified copy of the above said resolution, Memorandum and Articles of Association of the Company and specimen signatures of the above said signatories for and on behalf of the Company and be informed from time to time by a notice in writing under the hand of the Chairman of any changes which may take place therein and be entitled to act upon such notice until the receipt of further notice under the hand of the Chairman.
17 October 2012
Specimen of General meeting resolution for approval of dividend
The Chairman appraised that the Board has proposed to pay dividend @ 20% (Rs. 2) on the fully paid up Equity Shares of Rs. 10 to the Equity Shareholders of the Company during the year 2005-06.
The Chairman proposed the following motion which was seconded by Shri LND for the approval by way of an Ordinary Resolution:
RESOLVED THAT in terms of the recommendation of the Board of directors of the Company, the approval of the members of the Company be and is hereby granted for payment of dividend @ 20% (Rs. 2) on the fully paid-up Equity Share of Rs. 10 each of the Company for the year 2005-06 and the same be paid to all the members whose names appear in the Register of Members on 30th September, 2006 and in case of the shares held in the electronic mode to those members whose names appears in the records of the Depository participants as on 30th September, 2006.
The Chairman appraised that the Board has proposed to pay dividend @ 20% (Rs. 2) on the fully paid up Equity Shares of Rs. 10 to the Equity Shareholders of the Company during the year 2005-06.
The Chairman proposed the following motion which was seconded by Shri LND for the approval by way of an Ordinary Resolution:
RESOLVED THAT in terms of the recommendation of the Board of directors of the Company, the approval of the members of the Company be and is hereby granted for payment of dividend @ 20% (Rs. 2) on the fully paid-up Equity Share of Rs. 10 each of the Company for the year 2005-06 and the same be paid to all the members whose names appear in the Register of Members on 30th September, 2006 and in case of the shares held in the electronic mode to those members whose names appears in the records of the Depository participants as on 30th September, 2006.
17 October 2012
Payment of dividend in proportion to the time and amount paid
Section 93 of the Act, states that a company may, if so authorised by its articles, pay dividend in proportion to the amount paid up and time of receipt, on each share where a larger amount is paid on some shares than on others. Therefore, if the articles of the company does not authorise payment of dividend in proportion to the amount paid up on each share, the payment of dividend will have to be made only in proportion to the called up amount on the nominal value of the share capital of the company.
Section 93 of the Act, states that a company may, if so authorised by its articles, pay dividend in proportion to the amount paid up and time of receipt, on each share where a larger amount is paid on some shares than on others. Therefore, if the articles of the company does not authorise payment of dividend in proportion to the amount paid up on each share, the payment of dividend will have to be made only in proportion to the called up amount on the nominal value of the share capital of the company.
17 October 2012
Compulsory requirement for making provisions for depreciation before payment of dividend
In terms of the provisions of section 205 of the Act, no company can pay dividend in any year without charging depreciation in the profit and loss account for the current year and that there is no balance of un provided depreciation of any earlier year or years.
However, the Central Government has power to allow any company in the public interest to pay dividend for any financial year out of the profits for that year or any previous financial year without providing for depreciation. [Section 205(1)(c)] .The application is required to be filed to the Central Government electronically.
In terms of the provisions of section 205 of the Act, no company can pay dividend in any year without charging depreciation in the profit and loss account for the current year and that there is no balance of un provided depreciation of any earlier year or years.
However, the Central Government has power to allow any company in the public interest to pay dividend for any financial year out of the profits for that year or any previous financial year without providing for depreciation. [Section 205(1)(c)] .The application is required to be filed to the Central Government electronically.
17 October 2012
Payment of dividend in case where the company has incurred loss in a previous year
Section 205(1)(b) provides that if a company has incurred loss in any previous year or years, then the amount of loss or an amount which equal to the amount provided for depreciation for the year or those years whichever is less shall be set off against the profit of the company for the year for which dividend is proposed to be declared or paid. Therefore, it cannot pay dividend in the latter year unless the company has adjusted the amount of loss against the profits of the year referred to above. The company shall ensure that the previous year's depreciation will be duly provided before paying dividend.
Section 205(1)(b) provides that if a company has incurred loss in any previous year or years, then the amount of loss or an amount which equal to the amount provided for depreciation for the year or those years whichever is less shall be set off against the profit of the company for the year for which dividend is proposed to be declared or paid. Therefore, it cannot pay dividend in the latter year unless the company has adjusted the amount of loss against the profits of the year referred to above. The company shall ensure that the previous year's depreciation will be duly provided before paying dividend.
17 October 2012
Requirement for compulsory transfer of certain percentage of profit to reserves:
Every company shall transfer a portion of its net profit of the year to general reserve before deciding to pay dividend. The amount of net profit transferred to reserve shall vary with the rate of dividend proposed to be paid and as per the Companies (Transfer of Profits to Reserves) Rules, 1975.
Every company shall transfer a portion of its net profit of the year to general reserve before deciding to pay dividend. The amount of net profit transferred to reserve shall vary with the rate of dividend proposed to be paid and as per the Companies (Transfer of Profits to Reserves) Rules, 1975.
17 October 2012
Dividend shall be paid to registered shareholders and beneficial owners under CSDL/NSDL
Section 206 provides that no dividend shall be paid by a company in respect of any shares therein except:—
(a) to the registered holders of such shares or to his order to his bankers; or
(b) in case if the share warrants has been issued in respect of shares u/s 114, to the bearer of such warrants or to his bankers.
In the case of joint holdings, the dividend shall be paid to the person whose name is registered first in the books. It may be noted that the person whose name is named first in the application for shares is entered first in the Register of members. There will be no objection to send the dividend to any other jointholder, if a request is made to the company signed by all the jointholders.
In case if the shares are held in electronic mode, the dividend will be paid to the beneficiaries whose names as may be provided by the CDSL/NSDL to the Company or its registrar on the record date or date of book closure as the case may be.
Section 206 provides that no dividend shall be paid by a company in respect of any shares therein except:—
(a) to the registered holders of such shares or to his order to his bankers; or
(b) in case if the share warrants has been issued in respect of shares u/s 114, to the bearer of such warrants or to his bankers.
In the case of joint holdings, the dividend shall be paid to the person whose name is registered first in the books. It may be noted that the person whose name is named first in the application for shares is entered first in the Register of members. There will be no objection to send the dividend to any other jointholder, if a request is made to the company signed by all the jointholders.
In case if the shares are held in electronic mode, the dividend will be paid to the beneficiaries whose names as may be provided by the CDSL/NSDL to the Company or its registrar on the record date or date of book closure as the case may be.
17 October 2012
Dividend warrants shall be posted/sent/credited within 30 days from the date of approval
Pursuant to section 207, where a dividend has been declared by a company, it has to be paid or the warrant in respect thereof has to be sent/posted within 30 days from the date of declaration to the shareholders entitled to the same. Dividend warrants in respect of interim dividend shall also be posted within 30 days from the date of approval of the Board of directors of the company.
If the above provision could not be followed for the following reasons, no offence shall be deemed to have been committed by the company:—
(a) where the dividend could not be paid due to reason of operation of law;
(b) where a shareholder has given directions to the company regarding the payment of dividend and those directions could not be complied with;
(c) where there is a dispute regarding the right to receive dividend;
(d) where the dividend has been lawfully adjusted by the company against any sum due from the shareholder; or
(e) where the delay is not due to default on the part of a company.
Where dividend is not paid or warrant have not been posted within 30 days from the date of declaration to any shareholder entitled to the payment of the dividend, every director shall, if he is knowingly a party to the default, be punishable with simple imprisonment up to three years and shall also be liable to a fine up to Rs. 1,000 per day during which the default continues. The company shall also be liable to pay interest at 18% per annum for the period of default.
Once a dividend warrant is posted at the registered address of the shareholder, it is deemed to have been paid within the meaning of section 205A. The section made failure to post the warrant, and not its non-receipt by the shareholder is an offence. The obligation to pay the dividend would be discharged when either is done. In the case of Keebs Biochemicals Ltd. v RoC (2002) CLC 1564 (AP) it was held that the company had deposited the unpaid dividend into the special dividend account unless the petitioners had got knowledge about non-encashment, the question of transferring that amount to an unpaid dividend account would not arise that amount was already in such an account.
Pursuant to section 207, where a dividend has been declared by a company, it has to be paid or the warrant in respect thereof has to be sent/posted within 30 days from the date of declaration to the shareholders entitled to the same. Dividend warrants in respect of interim dividend shall also be posted within 30 days from the date of approval of the Board of directors of the company.
If the above provision could not be followed for the following reasons, no offence shall be deemed to have been committed by the company:—
(a) where the dividend could not be paid due to reason of operation of law;
(b) where a shareholder has given directions to the company regarding the payment of dividend and those directions could not be complied with;
(c) where there is a dispute regarding the right to receive dividend;
(d) where the dividend has been lawfully adjusted by the company against any sum due from the shareholder; or
(e) where the delay is not due to default on the part of a company.
Where dividend is not paid or warrant have not been posted within 30 days from the date of declaration to any shareholder entitled to the payment of the dividend, every director shall, if he is knowingly a party to the default, be punishable with simple imprisonment up to three years and shall also be liable to a fine up to Rs. 1,000 per day during which the default continues. The company shall also be liable to pay interest at 18% per annum for the period of default.
Once a dividend warrant is posted at the registered address of the shareholder, it is deemed to have been paid within the meaning of section 205A. The section made failure to post the warrant, and not its non-receipt by the shareholder is an offence. The obligation to pay the dividend would be discharged when either is done. In the case of Keebs Biochemicals Ltd. v RoC (2002) CLC 1564 (AP) it was held that the company had deposited the unpaid dividend into the special dividend account unless the petitioners had got knowledge about non-encashment, the question of transferring that amount to an unpaid dividend account would not arise that amount was already in such an account.
18 October 2012
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