Dividend

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 May 2016 Dear Experts,
Pls clarify weather a pvt. Ltd. Company
Can provide dividend to its share holders
Or not if yes what its criteria,

Regard
Gaurav sharma

c.bakshi

c.bakshi (Expert)
Follow

14 May 2016 YES, a private company can

However, the company has to deduct TDS on the amount of dividend as per the provisions of income tax. If the company wants to declare dividend within 2 AGM, then it is termed as interim dividend and Call a board meeting and passed a resolution and the company can pay it from its reserve & surplus balance which should be from free reserve, you have to open a separate bank account to transfer the amount of dividend to that account and pay to the respective shareholders
Follow section 124 & 125 of companies act.

Querist : Anonymous

Querist : Anonymous (Querist)

14 May 2016 Sir.. i didn't got your point that if the company
want to declare dividend within two agm
Pls clarify the issue of within two agm with
An example if possible...

Upgrade to CAclubindia Pro. Subscribe Now!

c.bakshi

c.bakshi (Expert)
Follow

15 May 2016 I MEAN A DIVIDEND DECLARED WITHIN 2 AGM IS CALLED "INTERIM DIVIDEND". IF THE COMPANY WANT TO PAY INTERIM DIVIDEND, IT MAY DO SO OUT OF ITS FREE RESERVE AND MORE INFORMATION REFER TO SECTION 124 & 125 OF COMPANIES ACT, 2013

Querist : Anonymous

Querist : Anonymous (Querist)

16 May 2016 But sir as per my knowledge for one FY only
one AGM will be conduct .... its confusing
Me how the two agm can be held for one
Fy...
plz clarify my doubt....

c.bakshi

c.bakshi (Expert)
Follow

16 May 2016 My Dear Friend, Dont get confused, Time between 2 AGM means 30sept 2014 to 30 sept,2015 you can declare dividend and the declared dividend is called interim dividend which the company can pay out of its free reserve

Querist : Anonymous

Querist : Anonymous (Querist)

17 May 2016 What is this free reserve,

c.bakshi

c.bakshi (Expert)
Follow

18 May 2016 as per section 2 (43) of the Companies Act, 2013 FREE RESERVE AND THOSE RESERVE WHICH ARE AVAILBLE TO USE AT ANY POINT OF TIME e.g. General Reserve.

Upgrade to CAclubindia Pro. Subscribe Now!

Querist : Anonymous

Querist : Anonymous (Querist)

18 May 2016 Sir.if i have paid interim dividend from
Reserve & surplus balance then what
accounting entry of declaring dividend
and paid the same will be pass.....