Excess Dividend Received
This query is : Resolved
23 February 2010
what is the procedure if a company received excess dividend.
Excess dividend have been received because of shares sold but not got transferred & even the transferee has not asked for the same.
Should the company book the same as income or it should be refunded to Company or it is to be deposited in Investor education fund ?
Excess dividend have been received because of shares sold but not got transferred & even the transferee has not asked for the same.
Should the company book the same as income or it should be refunded to Company or it is to be deposited in Investor education fund ?
23 February 2010
It should be refunded to the eligible shareholder as early as possible to avoid any future dispute.
Regards
Regards
23 February 2010
as per my knowledge,
its the duty of transfree to send duly completed transfer deed to the stock exchange for registering transfer, here it seems that he has not sent it for transfer hence the name of transfror remains as on record date as in register of members, soit may be treated as income from investment, as regards transfering the dividend amount to transfree the issue remains is how transfror (if company) can send this money to transfree because there again will be problem under which head it can be given,
but as per law the person whose name appears on register of members as on record date receives dividend, hence transfror can treat it as income from investment
its the duty of transfree to send duly completed transfer deed to the stock exchange for registering transfer, here it seems that he has not sent it for transfer hence the name of transfror remains as on record date as in register of members, soit may be treated as income from investment, as regards transfering the dividend amount to transfree the issue remains is how transfror (if company) can send this money to transfree because there again will be problem under which head it can be given,
but as per law the person whose name appears on register of members as on record date receives dividend, hence transfror can treat it as income from investment
23 February 2010
The best course of action would be to book the income once. If the amount is too big and you apprehend that you might be required to refund it, then keep a provision in the books forthe excess amount. Your auditors too would be satisfied with such treatment.
23 February 2010
I concur with the view expressed by Chandranil.
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