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Pvt Ltd Dividend Limits - options

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Kiran Deven Balkat

Lt-Deven

21 Points Posted on 16 July 2021

Hey, I have a pvt company with paid up capital in shares of 15 Lakhs (3 equal shareholders). But the bank balance is 85 Lakhs. I would like to withdraw 60 Lakhs (between us) but have been told this is not possible as capital is 15 Lakhs and the company cannot withdraw more than that in a year.

Is this right? I there an alternative to a dividend?

Thanks, Kiran

Replies (2)

Quick Summary

A private limited company owner with a £15 lakh paid-up capital but an £85 lakh bank balance wants to withdraw £60 lakh. They've been told this isn't possible due to the capital limit. The discussion explores alternatives to dividends, including potential share capital reduction with tribunal permission, or drawing dividends from accumulated profits as per Section 123 of the Companies Act. Another suggestion is to take advance remuneration and adjust future salaries.

yasaswi gomes

My grammar is 💯 good I

5110 Points Posted on 17 July 2021

You have to write to the tribunal and take permission,

you can reduce the share capital by letting hem know that you want to pay off any paid-up share capital which is in excess of the wants of the company,

This is the first me alternative I can find currently from companies act.

https://www.mca.gov.in/Ministry/pdf/CompaniesAct2013.pdf

yasaswi gomes

My grammar is 💯 good I

5110 Points Posted on 17 July 2021

Did you mean 15 lakhs inr? Sorry, I thought it was share number. Now, section 123 proclaims that, dividends can be given out of accumulated and current years profits, that’s why you can withdraw that amount.

Now you can take advance remuneration and adjust future salary with this amount by taking very less salary.

https://www.caclubindia.com/forum/how-can-a-director-md-withdraw-money-from-pvt-ltd-curr-acct-340520.asp