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Dividend declaration - divdend in kind by pvt.ltd co possibe

Co Act 2013 461 views 1 replies

Niraj

Service

29 Points Joined June 2008

Dear Professionals,

Can a India Pvt. Ltd Company declare dividend and pay in kind or adjust the dividend against outstandings of shareholders (parent company which is holding 100% of its shares and what if parent is foreign compnay). Advise / Comments with reference to relevant provisions to new companies act 2013 or rules 2013 or any other act like FEMA or Income tax Act.

Thanks & Regards

Replies (1)

P C Agrawal

Registered independent director Past Ch

8229 Points Joined March 2007

Sec.123(5) of CA 2013 clearly provides that dividend shall not be payable except in cash. Further, Sec.123(4) also clearly provides that dividend shall be deposited in a separate Bank account (hence cannot be adjusted against dues of shareholders). There is no scope of any doubt on this.