Interim dividend

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Suraj Singh (Querist)
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22 October 2013 1. Whether a separate bank account to be opened in case of PRIVATE LIMITED COMPANY also, where all the shareholders are family members?

2. Advertisement in the Newspaper U/s 154 of the companies Act is applicable in case of PRIVATE LIMITED also?

Ajay Mishra

Ajay Mishra (Expert)
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22 October 2013 Hi

The Articles of the company must authorise the Board to declare interim dividend. Regulation 86 of Table 'A' provides that the Board may from time to time pay to the members such Interim dividend as appear it to be justified by the profit of the company.
Where there is no power in the articles authorising the Board to pay interim dividend, the only way open to the company is to pay dividend after the same is declared at the annual general meeting. Even in respect of the latter the Articles must contain the provision therefor.

Interim dividend declared by the Board of directors of the company shall be transferred to the separate bank account within 5 days of such declaration and the amount so transferred shall not be utilised for any other purpose. The Interim dividend shall also be paid within thirty days from the date of its declaration by the Board.

Ajay Mishra

Ajay Mishra (Expert)
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22 October 2013
Opening of unpaid Interim dividend account:

Where an Interim dividend is declared by the Board of directors, which had not been paid or claimed within 30 days from the date of the declaration, the company shall transfer the unpaid or unclaimed Interim dividend to special account opened called "Unpaid Interim Dividend Account of XYZ Limited within seven days from the date of expiry of the said 30 days.

Interim dividend shall be payable in cash and may be paid by cheque or warrant sent through the post direct to the registered address of the shareholder entitled to the payment of Interim dividend, or in the case of joint shareholders, to the registered address of that one of the joint shareholders who is first named on the register of members, or to such person and to such address as the shareholders or the joint shareholders may in writing direct.

Ajay Mishra

Ajay Mishra (Expert)
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22 October 2013 Pleas check your articles on newspaper publication. It apply on both public or private company.

The company is required to publish notice in newspaper at least 7 days in advance once in English and other local language newspaper as required under section 154 of the companies Act, 1956.

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