Dividend in case of inadequate profit
This query is : Resolved
CA. Mala Rohara
(Querist)
29 March 2010
A listed company wants to declare 10% dividend on paid up share capital. But in current tear sufficeint profit is not available. Free Reseves are available. But in preceding 5 years company never declared dividend. Can co. declare dividend in current year using accumulated profits?
29 March 2010
Please see sec 205 of Companies Act, 1956.
Visit following link---
https://www.vakilno1.com/bareacts/companiesact/s205.htm
Visit following link---
https://www.vakilno1.com/bareacts/companiesact/s205.htm
29 March 2010
since no dividend has been declared in the last few years, it would not be possible to average out the same. In my view, no dividend can be paid.
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