DECLARATION OF DIVIDEND/INTERIM DIVIDEND
This query is : Resolved
16 July 2008
DEAR FRIENDS,
DURING AUDIT OF BOOKS OF ACCOUNT OF A PVT LTD I NOTICED THAT,THE COMPANY HAS DECLARED INTERIM DIVIDEND OUT OF ITS RESERVE WHILE HAS ENOUGH CREDIT BALANCE IN PROFIT AND LOSS ACCOUNT.CAN A COMPANY DO SO.IF YES, WHAT IS THE CONDITION RELATED THERETO.
DURING AUDIT OF BOOKS OF ACCOUNT OF A PVT LTD I NOTICED THAT,THE COMPANY HAS DECLARED INTERIM DIVIDEND OUT OF ITS RESERVE WHILE HAS ENOUGH CREDIT BALANCE IN PROFIT AND LOSS ACCOUNT.CAN A COMPANY DO SO.IF YES, WHAT IS THE CONDITION RELATED THERETO.
17 July 2008
"Declaration of Dividend out of reserves Rules 1975" allow a company to declare dividend out of reserve if there no profits.
it means, first a company shud exhaust its profits (current and accumulated), then move to reserves.
in ur case, the company shud not declare dividend out of reserve bcoz it have suffcient profits.
it means, first a company shud exhaust its profits (current and accumulated), then move to reserves.
in ur case, the company shud not declare dividend out of reserve bcoz it have suffcient profits.
17 July 2008
DEAR MR TYAGI,
THANKS FOR YOUR REPLY.
THANKS FOR YOUR REPLY.
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