I want to know some important details about dividend declaration by pvt ltd and unlisted pub ltd companies:
1.Can a company declare dividends monthly?
2.Can it declare dividends from profits generated from "Other income" i.e. investing in stock market etc?
3.What is the maximum time limit allowed between dividend declaration and distribution?
4.If a company re-invests its monthly profits into the business and gets higher return on capital by compounding rate -can it pass on the benefit to the shareholder at the end of the year: e.g Company A makes 10% per month net profit on Rs 100 capital deployed and it re-invests the profits into the business every month and after 12 months the capital invested grows ( @ 10% monthly compounded) to Rs 313.Can the company declare and distribute dividend from this profit e.g @ half of the net profit(313) -Rs 155 to the shareholder.If a share is Rs 10 each then dividend of Rs 15.5 per share.
Pls help me to find the answers to these queries as it is very important.
Raakesh
CAclubindia
