CA FaIyaZ PaTrAwaLa (CA) (276 Points)
28 October 2009
Punit Tibrewal
(student )
(1684 Points)
Replied 28 October 2009
no..profit on re-issue of shares is a capital profit..!
FATEMA
(CHARTERED ACCOUNTANT)
(719 Points)
Replied 28 October 2009
Dear Faiyaz,
Surplus on re-issue of shares is transferred to capital reserve.
Capital reserve is a reserve of a corporate enterprise which cannot be used for distribution of profit.
Sandeep Pandey
(CA FINAL)
(1306 Points)
Replied 28 October 2009
I agree with Kajri........................
CA FaIyaZ PaTrAwaLa
(CA)
(276 Points)
Replied 28 October 2009
CA Dhiraj Ramchandani
(CA, M. com)
(10823 Points)
Replied 28 October 2009
even i go wid other members...
it cannot be used
| Originally posted by :KAJRI | ||
| " | Dear Faiyaz, Surplus on re-issue of shares is transferred to capital reserve. Capital reserve is a reserve of a corporate enterprise which cannot be used for distribution of profit. |
" |
it's right
The Harshit Aggarwal
(B.Com(H) ,CS Final)
(5278 Points)
Replied 28 October 2009
Me too agree with Kajri and other frnds.,
it can't be distributed
CA MOHIT GUPTA
(PRACTICE)
(49 Points)
Replied 29 October 2009
Dear All,
As per the provision of Companies Act, 1956 the amount remaining to the credit of Share Forfieted A/c after applying for discount on re-issue must be transferred to Capital Reserve A/c. So it can not be used for Divivdend Distribution because Capital Reserve A/c have restricted use and only Free reserves can be used for distribution of dividends.
Thanx
CA Rahul Jain
(CA)
(1162 Points)
Replied 03 November 2009
hi guys
all the views expressed above r correct to some extent. but as per the case cited above, amount remaining to the credit of share forfieted a/c can be used to distribute the dividend.
CAclubindia
