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Dividend From Capital Reserve

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(Querist)
01 June 2009 Helloe Friends
My Query is
Can Dividend Can be Distributed From Capital Reserve ?
If Can Be Declare States the Circumstances as per the companies Act ,
1956 , under which it cac be declared or not?
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Bhaskaran Chackrapani Warrier

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Bhaskaran Chackrapani Warrier (Expert)
01 June 2009 No. Pl refer explanation to rule 2 of Companies (Declaration of dividend out of reserves)Rules,1975.
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Ankur Garg

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Ankur Garg (Expert)
03 June 2009 Agree with Mr. Warrier.

As it is clearly prohibited by the explanation referred above.
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CA Nitin Wadhwani

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CA Nitin Wadhwani (Expert)
05 June 2009 If the capital reserve is realised in cash, then dividend can be declared from it.

No Prohibition on it then.

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