Please clarify on these issues.
1) Whether the Rules are same for dividend out of Past profits or Reserves,
2) Whether the accumulated losses include current year losses to be set-off against the amount withdrawn from the reserves.
3) As per the plain reading of the rules Dividend out of Reserves
Condition 2 says the Amount withdrawn shall not exceed 1/10 of the PAID up capital + FREE reserves.
Condition 3 says the amount of RESERVES shall not fall bellow 15% of the paid up capital.
Reserves under condition 3 would mean both the FREE reserves and Other reserves such as Development Rebate Reserve, Capital Redemption Reserves, Statutory Reserve(which are usually Not considered as Free Reserves)
4) Dividend can be issued out of capital profits but not out of the capital reciepts? what is the difference between them? Whether capital recepts include PAID UP share capital.
CAclubindia
