A specific question on section 206
This query is : Resolved
06 August 2012
206. DIVIDEND NOT TO BE PAID EXCEPT TO REGISTERED SHAREHOLDERS OR TO THEIR ORDER OR TO
THEIR BANKERS
(1) No dividend shall be paid by a company in respect of any share therein, except -
(a) to the registered holder of such share or to his order or to his bankers ; or....
my question is based on above provision (or to his order) can a registered member issue an order / mandate to a company to pay his share of dividend to another member? Is it legally valid when company does not receive any transfer of instrument as such. Please help ASAP
206. DIVIDEND NOT TO BE PAID EXCEPT TO REGISTERED SHAREHOLDERS OR TO THEIR ORDER OR TO
THEIR BANKERS
(1) No dividend shall be paid by a company in respect of any share therein, except -
(a) to the registered holder of such share or to his order or to his bankers ; or....
my question is based on above provision (or to his order) can a registered member issue an order / mandate to a company to pay his share of dividend to another member? Is it legally valid when company does not receive any transfer of instrument as such. Please help ASAP
06 August 2012
Hi
Department Clarification (Circular dated 15-3-1989 (1989) 65 Comp Case 573 (St))
Attention is invited to section 206 of the Companies Act, 1956, which empowers shareholders to authorise the company to pay dividend, on his behalf, to any person or to his bankers, The Companies may be advises to bring these provisions to the notice of their shareholders so that they could avail of the facility provided under the law.
On the basis of above circular shareholders have right to authorise any person to receive dividend amount on his behalf.
Department Clarification (Circular dated 15-3-1989 (1989) 65 Comp Case 573 (St))
Attention is invited to section 206 of the Companies Act, 1956, which empowers shareholders to authorise the company to pay dividend, on his behalf, to any person or to his bankers, The Companies may be advises to bring these provisions to the notice of their shareholders so that they could avail of the facility provided under the law.
On the basis of above circular shareholders have right to authorise any person to receive dividend amount on his behalf.
06 August 2012
In very olden years, where shares were pledged, the bankers used to take the benefit of this. At paying dividend level, you need not consider this unless it is duly registered with the company.
06 August 2012
Mr. Mishra,
Can you please forward me the circular, i am unable to locate that.
So, in short, a memeber can direct a company to pay his share of dividend to another member even without transfer of shares and this is valid as per above circular. Am i right?
Can you please forward me the circular, i am unable to locate that.
So, in short, a memeber can direct a company to pay his share of dividend to another member even without transfer of shares and this is valid as per above circular. Am i right?
06 August 2012
You need to register the mandate in the books of the company without which the efforts will go haywire.
07 August 2012
Mr. Jogelker will you please explain what you exactly want to mean " register the mandate in the books of the company", i am not very much conversant about the procedure.
07 August 2012
Yes, in view of DCA circular dated march 15, 1989 the shareholders have the right to authorise the company to pay dividend to their bankers or to any person on their behalf. Though this may sound a bit illogical since in view of clear mandate of section 206 itself, a company is obliged to pay dividend only to registered shareholders and to none else otherwise it will amount to non payment of dividend. Having said that, in view of department circular dividend can be paid at the instance of registered shareholder even to a non member. You may find the complete text of this circular in Rammaiya's company law.
07 August 2012
1. The company should maintain a separate register for such requests. 2.The written requests conforming to KYC norms may be had from such share holder. 3.The specimen signature should be verified. (These are the requirements from AUDITING view point.
07 August 2012
Thanks all,
My question to
Mr. Joglekar,
Previously, you stated about to register the mandate now if the company follow the above compliance as you suggested for will be sufficient compliance for the above.
My question to
Mr. Joglekar,
Previously, you stated about to register the mandate now if the company follow the above compliance as you suggested for will be sufficient compliance for the above.
07 August 2012
Yes. It will be sifficient compliance.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- REGARDING GST ON COMMERICIAL PROPERTY
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- TDS U/S. 194NF
- ITC temporary reversal and reclaim
- GST on export of services and Input Credit
- Is this income indian or foreign income?
- Applicable TDS rate for sale of property in Nov 2024
- BLOCKED-INELIGIBLE GST CREDIT
- REPATRIATION OF AGRICULTURE INCOME IN INDIA OF NRI/PIO RECEIVED IN NRO ACCOUNT
- REGARDING 25 AS DATE OF PAYMENT AND DATE OF BOOKING
- RCM INVOICING FROM NOV-2024
- Short and Excess provision of expenses
- Issue of gst e invoice
- Interchangeable words in accounts
- Adjusted profit/Loss in the case of LLP and Pvt. Ltd.company
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
Trending Online Classes
CAclubindia
