Dividend

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This query is : Resolved

Akshay (Querist)

10 October 2010 A pvt lts co wants to declare dividend...as per the act the amount of dividend has to be deposited in sepearate bank account within 5 days of declaration....does that mean the amount has to be deposited within 5 days of AGM ...or else which date to be considerd?

whether a new account has to be opened for this purpose of it is to be transferred to any of the bank account of the company

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

10 October 2010 Section 205(1A) stipulates that dividend should be deposited with in 5 days of declaration menaning thereby that in the case of dividend other than interim dividend date of AGM is the crucial date.

Separate bank accounts means a new and exclusive account is required to deposit the dividend.

Ajay Mishra

Ajay Mishra (Expert)

11 October 2010 Dear Mr. Akshay

A company which has declared dividend must open an account in scheduled Bank and transfer the entire net amount of dividend to the above account within 5 days from the date of declaration and simultaneously should dispatch the dividend warrant to the shareholders and should not wait for 37 days to transfer the amount to that account.

Section 205(1A) maid it compulsory to open a separate account in schedule bank and section 205A made it compulsory that amount of dividend including interim dividend shall be deposited in a separate bank account if it is not paid within time from the date of declaration,.

If you not comply the provisions of section 205A, you will be punishable u/s 205A(8). Of the Companies Act, 1956.

Regards

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