Dividend From Capital Reserve

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CA Mayur Sojrani (Querist)
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01 June 2009 Helloe Friends
My Query is
Can Dividend Can be Distributed From Capital Reserve ?
If Can Be Declare States the Circumstances as per the companies Act ,
1956 , under which it cac be declared or not?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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01 June 2009 No. Pl refer explanation to rule 2 of Companies (Declaration of dividend out of reserves)Rules,1975.

Ankur Garg

Ankur Garg (Expert)
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03 June 2009 Agree with Mr. Warrier.

As it is clearly prohibited by the explanation referred above.

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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05 June 2009 If the capital reserve is realised in cash, then dividend can be declared from it.

No Prohibition on it then.

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