Niraj (Service) (29 Points)
04 August 2014Dear Professionals,
Can a India Pvt. Ltd Company declare dividend and pay in kind or adjust the dividend against outstandings of shareholders (parent company which is holding 100% of its shares and what if parent is foreign compnay). Advise / Comments with reference to relevant provisions to new companies act 2013 or rules 2013 or any other act like FEMA or Income tax Act.
Thanks & Regards
P C Agrawal
(Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad)
(8229 Points)
Replied 06 August 2014
Sec.123(5) of CA 2013 clearly provides that dividend shall not be payable except in cash. Further, Sec.123(4) also clearly provides that dividend shall be deposited in a separate Bank account (hence cannot be adjusted against dues of shareholders). There is no scope of any doubt on this.
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