Dividend usually is a payment made by a company to its shareholders out of distributable profit. In layman term, it is a share of profit for a shareholder. The Companies Amendment Act, 2017 read with notification dated 9th February 2018 amended law related to declaration of dividend. This post discusses law related to dividend after recent amendment in the Companies Act, 2013.
Tag Archives: Dividend
The Ministry of Corporate Affairs placed here on its website a draft of the Companies (Declaration and Payment of dividend) Second Amendment Rules, 2015. These amendment Rules will come into force from the date of its publication in Official Gazette.
These amendment rules proposed to omit Rule 3(5) of the Companies (Declaration and Payment of dividend) Rules, 2014.
The Deleted Rule 3(5) read as under,
“No company shall declare dividend unless carried over previous losses and depreciation not provided in previous year are set off against profit of the company of the current year the loss or depreciation, whichever is less, in previous years is set off against the profit of the company for the year for which dividend is declared or paid.”
[A new Web portal LawStreetIndia launched on Pongal this year. This piece was originally published on LawStreetIndia here on 15th January 2015. This blog wish all success to the portal]
Investor Education and Protection Fund is a permanent parking lot of all unclaimed shares and dividend under the Companies Act. Unending hunger of fund by government results its claim on everything unclaimed with help of hurriedly drafted laws. Yes, for all legal purpose, government is not going to own such money and keep it in trust but fund so transferred help to arrange mileage for government as administrator of such fund.
In an earlier post here, we have discussed provisions related to dividend under the Companies Act, 2013. Now we have the Companies (Declaration and Payment of Dividend) Rules 2014 as notified on 31st March 2014 for discussion.
Dividend is a payment made by a company to its shareholders out of distributable profit.
DECLARATION OF DIVIDEND (SECTION 123):
A company shall declare dividend and pay it, only out of profit of the company for the financial year or out of undistributed profit of any previous financial year or out of both.