Pinkey Chowbey (ca) (64 Points)
11 May 2009Can a private Ltd Company transfer its profits to General Reserves if its not paying any dividend in the year of such transfer neither has it paid any dividend in any of the immediately preceding financial years. It has been carrying its accumulated profits in its Profit & Loss account. Is The Companies Transfer of Profits to Reserves Rule 1975 applicable in this case. What is the maximum amount a company can transfer in such a situation.
CA SUDIPTA SINHA
(Commerce Coaching- Accounts Cost FM)
(735 Points)
Replied 12 May 2009
as per 'Companies Transfer of Profits to Reserves Rule 1975' there is no prohbition regarding transfer to reserve exceeding the minimum transfer that is to be made mandatorily. hence a company may transfer to reserve a higher %.
CAclubindia
