CA Inter Revision | Corporate And Other Laws | Declaration And Payment Of Dividend | Hindi + English
J. K. Shah Classes・2 minutes read
Chapter 8 of the Companies Act 2013 covers the Declaration of Dividend, Unpaid Dividend Account (UDA), and rules for dividend distribution, including penalties for delays and conditions for payment. It outlines the requirements and procedures for paying dividends, including the use of free reserves, dividend calculations, and penalties for late payments.
Insights
- Dividends must be paid out of free reserves, excluding specific types of reserves like Revaluation Reserve and purpose-specific reserves, with strict rules on profit calculations and methods of payment, ensuring transparency and legality in the distribution of profits to shareholders.
- Non-compliance with dividend payment regulations can result in significant penalties, including fines for both companies and officers, interest payments on delayed dividends, and potential legal consequences, highlighting the importance of adhering to the Companies Act 2013 guidelines to avoid financial and reputational risks.
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Recent questions
What is the definition of dividend?
Profit distribution among shareholders.
How are dividends paid to shareholders?
Through cash, cheque, warrant, or electronic mode.
What are the conditions for paying dividends in the absence of profits?
Utilizing past year profits, setting off losses, maintaining minimum reserves.
What are the penalties for delayed dividend payments?
Interest payments, possible jail time for directors.
What happens to unclaimed dividends?
Deposited in Unpaid Dividend Account (UDA), then to Investor Education Protection Fund (IEPF).
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