Payment of dividend

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Querist : Anonymous

Querist : Anonymous (Querist)

19 September 2010 Sir as per co's act before declaring div. We have 2 transfer certain % of profit of current year to reserves. If in current year there is loss n co pays div from part profits in p&l acc. Then how much can be transfered as in CY There is no profit

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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19 September 2010 If dividend is paid out of accumulated profits, provisions of The Companies(Transfer of Profits to Reserves)rules,1975 does not apply meaning thereby the transfer of the required % is not applicable.
However the company has to necessarily follow the provisions of The Companies (Declaration of Dividend Out of Reserves) Rules,1975 for declaring dividend out of accumulated profits.

Querist : Anonymous

Querist : Anonymous (Querist)

19 September 2010 But sir on which amt. As we have to transfer certain % basis. On which profit we calculate that %

Querist : Anonymous

Querist : Anonymous (Querist)

19 September 2010 But sir on which amt. As we have to transfer certain % basis. On which profit we calculate that %

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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19 September 2010 Current year profit.

Querist : Anonymous

Querist : Anonymous (Querist)

19 September 2010 but if there is loss then