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Payment of Dividend in CASH

jai prakash prajapat (company secretary) (32 Points)

14 April 2010

CAN A COMPANY PAY THE DIVIDEND AMOUNT BELOW RS. 100/- IN CASH

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6 Replies

Rasesh (CS CWA MBA (Fin) B.Com LL.B (Spl)) (6501 Points)
Replied 16 April 2010

The act provides for depositing the amount of dividend in a seperate bank account and paying it through the same account. Considering the same, I feel, paying dividend in cash would not be the right practice. However, if the company is closely held private limited company and you know that there will be no disputes, then you may take the risk of giving dividend in cash. Provided you also obtain signed receipts.

Personally, I would advice against it.

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CourseCart.in (Mentor at SHAYVIDZ Academy) (3756 Points)
Replied 16 April 2010

Rasesh Sir always have perfect answer...

CS Mayur Buha (Company Secretary) (238 Points)
Replied 16 April 2010

I am not agree with Mr. Rasesh. The co. act strickly saying that Dividand Amt. should be deposited within 30 days of its decleration in bank A/c, so it shall be follow by company whether it is pvt. ltd. co. or public one.