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Dividend
A company has earned a profit of rs. 1000 crores for the financial year 2016-17. It has proposed a dividend of 8.75%. However, it doesn't intend to transfer any amount to the reserves of the company out of profits earned. can that company do so??
Replies (1)
As per Sec 123 of The Companies Act, 2013, it is not mandatory to transfer any amount to reserves before declaration of dividend.
Hence the company can declare dividends without transferring any amount to reserves.
However as a matter of prudence, the company may transfer as the Dividend Policy of the company.
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