Hello sir/madam, Can a company borrow funds from a bank and distribute it as dividends to shareholders? is it possible.
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Quick Summary
This discussion clarifies whether a company can take out a bank loan to distribute as dividends to its shareholders. The answer is no. According to Section 123 of the Companies Act 2013, dividends must be paid from a company's current profits or accumulated profits from previous years.
No, Company cannot do so. As per section 123 of the Companies Act 2013, a Company can distribute the dividend out of the current profit of the Company or accumulated profits of the previous yeart.