Declaration of dividend.

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Ramya (Querist)
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16 August 2012 Can we declare dividend out of current year profit, without any ceiling/limit nor any transfer to reserve account.

Anusha

Anusha (Expert)
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16 August 2012 the Central Government may, if it thinks necessary so to do in the public interest, allow any company to declare or pay dividend for any financial year out of the profits of the company for that year or any previous financial year or years without providing for depreciation:

it shall not be necessary for a company to provide for depreciation as aforesaid where dividend for any financial year is declared or paid out of the profits of any previous financial year or years which falls or fall before the commencement of the Companies (Amendment) Act, 1960 (65 of 1960).

please go through Sec.205 of the Companies Act.