Payment of Dividend in CASH

The act provides for depositing the amount of dividend in a seperate bank account and paying it through the same account. Considering the same, I feel, paying dividend in cash would not be the right practice. However, if the company is closely held private limited company and you know that there will be no disputes, then you may take the risk of giving dividend in cash. Provided you also obtain signed receipts.

Personally, I would advice against it.

Rasesh Sir always have perfect answer...

I am not agree with Mr. Rasesh. The co. act strickly saying that Dividand Amt. should be deposited within 30 days of its decleration in bank A/c, so it shall be follow by company whether it is pvt. ltd. co. or public one.

So that's what i have recommended. Route it through the Bank only.

Ok but Section 205(3) of the Company Act, 1956 have used a particular sentance i.e. 'payment of dividand made in cash'

Payment in cash means that dividend in kind is not allowed.

If you interpret the words literally, then all the dividend payments should be made in hard cash. No cheques & dividend warrants?