If a company wants to declare dividend out of accumulated profits/reserves, such dividend shall not be made except in accordance with such rules as may be prescribed in this behalf. As per the exemption these rules shall not apply to a Gov Company. So, does it means that Gov company can't declare dividend out of accumulated profit ??
Menu
Dividend by gov company
Replies (1)
Yes as per notification dated 05/06/2015, companies that are wholly owned by CG/SG will not be able to declare dividends out of free reserves.
Proviso 2 to Sec 123 states that companies can declare dividends out of free reserves in accordance with the conditions laid down in Rule 3 (Dividend Rules). After the amendment this proviso is not applicable to 100% owned govt companies.
However, I am not sure about whether these (100% owened govt) companies can declare dividends out of accumulated profits which were not transfered to any reserve, i.e. balance in P&L account which has been carried from previous years.
Since the amendment only related to the proviso regarding reserves, I think these companies can still declare dividends of out balances carried in P&L account which was not transfered to any other reserve.
Recent Threads
- Performances of actors and singers
- Discount Received Income in GSTR  - 9
- Whether afer responding to query amount of expen
- Sample of board meetings of a private limited comp
- Filed IT return under old scheme , can he file rev
- Reconciling Zoho Books with Tally
- Freelance Accounting Services - Work From Home
- Spom exam doubt
- GST RCM on contractual consultant who works as lik
- Anyone registered for Spanish Language Course -ICA
Related Threads
CAclubindia
