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Necessity to transfer of dividend to a separate bank account

Sunil (Internal Auditor) (334 Points)

24 September 2012

Is it necessary to transfer the amount of divident declared in ace of a PRIVATE LIMITED COMPANY to a separate bank account within time

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5 Replies

Tanveer Md Masood (Indispensable) (361 Points)
Replied 24 September 2012

DEAR MR.SUNIL....

ONCE YOUR COMPANY DECLARES DIVIDEND , YOU NEED TO TRANSFER SUCH AN AMOUNT TO A SEPERATE DIVIDEND ACCOUNT OF THE INVESTORS BY OPENING AN ACCOUNT IN A SCHEDULED BANK ATER GIVING DUE NOTICE OR INFORMING THE INVESTOR. SUCH AN AMOUNT SHOULD BE DEPOSITED WITHIN 21 DAYS OF THE DECLARATION OF DIVIDEND.

REGARDS..

TANVEER MD MASOOD

CALCUTTA.

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Sunil (Internal Auditor) (334 Points)
Replied 24 September 2012

That means a new bank account is to be open in the name of company even if it is a private limited company and only two share holders are there?

Tanveer Md Masood (Indispensable) (361 Points)
Replied 24 September 2012

DEAR MR.SUNIL..

TANSFER TO A SEPERATE DIVIDEND ACCOUNT HAS TO BE MADE ONLY IN CASE OF PROFIT MADE AND A SUBSEQUENT DECLARATION OF DIVIDEND. THIS IS THE MODE OF PAYMENT TO THE SHAREHOLDERS OF THE COMPANY..

Sunil (Internal Auditor) (334 Points)
Replied 24 September 2012

Suppose the dividend is paid very next day to share holders directly via cheque, whether the above provision can overcome

Tanveer Md Masood (Indispensable) (361 Points)
Replied 24 September 2012

COMPANIES ACT DOES NOT PRESCRIBE PAYMENT OF DIVIDEND THROUGH CHEQUE..U NEED TO GO THROUGH THE PROCESS WHICH HAS BEEN MENTIONED IN MY PREVIOUS REPLIES.