if a company proposes and declares dividend,say 10 lakh,then is it compulsory for company to pay entire amount or can they pay lesser amount like 9 lakh to shareholders.Because in a practical sumwhen i made proposed dividend account then ,opening proposed dividend is 10 lakh,closing proposed dividend is 12 lakh,company paid dividend 9 lakh and in P/L the bal fig came 11 lakh.So according to question it means last yr proposed dividend was 10 lakh,but company paid 9 lakh only.How is it possible?
Please help.Ipcc student.
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Replies (2)
Yes when a company proposes and then declares dividend of say 10 lacs,then will have to pay 10 lacs as declared dividend is a liability
Coming to the question,if company has only proposed ₹10 lac dividend but didn't declare,then it's upto the board of directors discretion how much they wish to declare.If they declare 9lacs then it becomes a liability from provision.Will have to shell out
Coming to the question,if company has only proposed ₹10 lac dividend but didn't declare,then it's upto the board of directors discretion how much they wish to declare.If they declare 9lacs then it becomes a liability from provision.Will have to shell out
Yes agreed with the member. According to section 124 of Companies Act, if Board of Directors of the Company has declare the dividend of Rupees 10 Lakh, then it is the obligation on part of Company to pay the dividend within 30 days of declaration of dividend, but if Company does not pay dividend within 30 days , then within 7 days after expiry of 30 days (37) days( Maximum) from date of declaration of dividend to special bank account called unpaid dividend account
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