Payment of dividend amount

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This query is : Resolved

purshotam vyas (Querist)

08 October 2013 Dear all,

if company declare dividend amount then is it compulsory to first transfer dividend amouont to special accouont or we can direct pay from our normal operating account of company ?

Thanks in advance

CA Pallav Singhania

CA Pallav Singhania (Expert)

08 October 2013 The Company should deposit the dividend amount ( including interim dividend) within 5 days of its declaration in the separate bank account opened for this purpose.

Also Section 205 (1B) stipulates that the amount so deposited shall be used only for the purpose of payment of dividend ( whether interim or final).

Regards,

purshotam vyas

purshotam vyas (Querist)

09 October 2013 Thanks sir,

As per your reply, company should (not must) deposit it means its not compulsory to deposit in separate account. So its depend on our company interim policy whether we pay from our normal company accouont or form separate account. is it right sir ?

CA Pallav Singhania

CA Pallav Singhania (Expert)

09 October 2013 As per Companies Act, its compulsory to deposit the dividend into separate Bank Account within 5 days from the date declaration...

purshotam vyas

purshotam vyas (Querist)

09 October 2013 Sir,
section 205 says transfer of unpaid divided to special account but not anything about dividend amount transfer to separate account. Can you give more clarification with section on this ?

Thanks

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