Dear All,
There is a Company X, where is 75 % is held by the promoters and 25 % by shareholders. Company X has Rs 100 as the profit.
Company X intends to obtain a no objection certificate from the promoters whereby the the entire Rs.100 will given to the shareholders
The general route which is followed is that the the promoters waive the entitlement of their dividend.But the Company X intends to obtain an NOC and declare the entire profits as dividend to the shareholders.
1) is the company entitled to do so? what are the legal implication.
2) is the Company required to have Rs 400 as the total profit to declare Rs 100 to the shareholders and keep remaing Rs. 300 for the promoters incase the right to obtain the dividend is excersised later on or for some other reason the right is revocable
CAclubindia
