dividend payment

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vishesh chaturvedi (Querist)
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14 October 2008 Can a company pay dividend in cash under acknowledgement

or there is any provision/rule which specified that it should be paid by cheque/warrants?

Sect 205A say co. must open a separate accout for div.and deposit div amount wthn 5 days frm the date of declaration.

If a pvt co. directly sending cheques in 30 days from the date of declaration.

whether is is violating the law.

CA Gaurav Khanna

CA Gaurav Khanna (Expert)
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14 October 2008 I do not think that you can pay dividend in cash.

Since as per section 205 (1A) you need to deposit the money in a separate bank account within five days from the date of declaration.

205A as refered by you is relating to the unclaimed dividend within a period of thirty days. Such amount has to be deposited to another bank account.