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Check List for Dividend
[Submitted by Sachin Manohar Dumbre,
B.Com., CA(Final) Student,
Mumbai, Maharashtra]
February 12, 2008
- Dividend may be paid out of current profit, or out of previous
year/s profit or out of money provided by the C.G. or by S.G. for the
payment of dividend, after providing for the provisions for the
depreciation and transfer to reserve.
- Recommended by the Board.
- Closure of register of members U/s 154 of the Act or fix a record
date by giving at least 7 days newspaper advertisements, one in English
and one in Local language.
- Declared by the AGM
- Once Declared by the AGM it becomes a debt on company
- Open a separate Bank account & deposit the amount of dividend to the
account with 5 days of recommendation of board. Account Name "XYZ Co.
Pvt. /Ltd. Dividend Account."
- The AGM may approve the rate of dividend at the rate lower then the
recommended.
- The Dividend Tax is to be deposited with 14 days of its approval in
AGM.
- The dividend should be paid either in cash or kind to the members
within 30 days from the date of AGM, except in cases as specified in the
Act.
- Dividend should be paid either by cheque or by dividend warrant.
- If the dividend is not paid within 30 days the same may be deposited
in a separate bank account named "XYZ Co. Pvt. /Ltd. Unpaid Dividend
Account."
- If the dividend is not paid within 7 years the same may be deposited
in "Investor Education & Protection Fund" from which dividend cannot be
paid.
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