The Companies Act, 013 * Summary Notes * Chapter $= 8 * Declaratfon cand Payment of dividenda a < Someone Asked, “Cah Anybody” CA replied, "Yes, and | Don't Think | JUST CAN, | KNOW I WILL.” i | *Xbuhat is Dividend 2 © Dividend 1s the Sharcholden's yetvin on. thelr inyesiment. in the company Vs part of dishibutable Profit The Company in GM can declare dividend but _No dividend Shall exceed the Gmount recommended ard, ° Dividend Recommended Approved by board by Shartholders Dividend is F Declared by Pasting © Detiaration of dividend gi higher raje__iban_the yate recommended by the Board fs not permitted. ince.Houever]2ZF Provided by HOA, Company Cun declare dividend in propayyion of its Paid yp Share Capita ° Pavan ts declared ava propor 1. of Nominal Fae Value ° declare dividend exceeding the Gmount vtommended by Boord oF directors mcg Types oF Dividend Tnitexim Fina) Dividend Dividend % May be declared by boord x Final dividend §s Of divectors Gt Ony time deciared Qt the FGM: in q FY. *& Tk can _be paid and declared % Rate of dividend between tuo ROMs recommended by the board cannot be ¥ Sources at declaration of Increased by it membex. Tntevim dividend a ‘Surplus Profits generated in (FN the quarter tobe declared * Th the Company has incuwed Joss dumn, Cunent FY upto end OF quarter immediately Preceding date oF declavatfon of dividend SUch inteim dividend Shall NF be declaved at a: vate Higher than average vate of dividend declared by Co during three Fs.Imp mM All provisions which qre applicable to the payment oF dividend Shall also apply in cae of interim dividend © Equity Shares |*" Dividend paid after paying the same to Preference Shartholdevs aS Cumulative Alon Cumulani Dividend @euumulareD Romayreas oF dividend unless it ts paid in in Future is payable Full Dividend Provisions vegardiny payment and declaration of dividend a & c v i L after Providiny OFtew Providing Money. Provided depritiaton as depridation as by Car]Sb for per Schedule T per Schedule IE dividend payment L by company $n Persuance oF Gre to be utilired 4. Guavanies Given by Govt re" GraemeFotlowing items Shall not be treated as Free Reserves Unrealised —Aatona) Revaluation ang hangs in soya ‘Gains: “Gains OF Fssts shown ge ably nnyied Resewve en equity Notes > BeFore declaration of any clividend, Previous lowes “and depriciation not provided th previow year or Yeas are required fo Sth OFF against proktot the Company For the Cent Year x [ because they are Mot earned in the Normal Course OF business, me ¥ = *+ Normally not Available for distribution as Profits 4 Ut Depriciation is not provided, two Consequences Value OF Asset wit be Probits oF Current “Overstated tn BS Year will be ovewttated = Transfers fo Reserves $= Transfer of Profits to Reserves For any FY has been 1eEH 40. the iscreation|OF The company. Therefore, a company is Free to al*Aransfer any portion of +3 profit to Resewes Qs i+ may deem fit. It may lio decide not to franster any amount to Reserves. IMP For case Study ‘F Declaration of Dividend when there 1s Tmadequany or absence of Profits, Clsscs) Mheve Tn any year, there ave no Qdequate profits for declaring dividend, the company may declave dividend transferred by Tt to Free Resewes Complying with fot conditions of RULES CONDITION 18— The rate of dividend declared shall not exceed the wates at whith dividend War declared in the immediately “preceeding three FAs. iF the ene Company has not declaved any dividend For . f amor in each of three qreceeding Fs CONDITION 2 = ‘The ‘otal amount to be drawn from Such accumulated profits Shall not cxceed tor. of [PUSC + FR] as appearing in latest Qudited BS. Tora Amt- that canbe drawn < tor. CPUSC+FR Eom _ Accumulated ProfitsQ@NOITLON 3 $= The amount so Withdeown shat be Fit ublized 40. Set OFF the lowes incurred in FY in which dividend is declared before declaration of dividend QNDITLON 4 $= The balance OF Reserves after such Withdraw! Shall not be less than Ir 7 ce Resewes # Conditions prescribed by Rule 3 are Mot applicable fo a ovs company j-e- even iAMhe condition OF los, it Can declare dividend but 4 has no need to Comply With 4 conditions oF Rule 3 4+ Depositing amount of Dividend t= The amount’ of dividend Cincluding interim dividend) Shall_be deporited in a Separate Account maintained with a Scheduled bank within Sdays from date oF declaration OF dividendEXCEPTION To Govt Compan! fhe requirement OF depositing money Q_ Separate Avcoun, hin S days. with @ Scheduled bank wii is_MOt applfcable * Payment OF dividend $= % Dividend Shall he payable only to the Registered gr _ Shavthoid ev fo his ge fohis ~ ‘order © In case Shareholder inform: the Company to pay dividend to & pavtiular banker @nd if ihe payment 1 made by Company, then Tt shall be deemed to be made to Shareholder _himsele A purchaser df shaver hoe name T1 nok wegittered in Register Of members Cannot claim payment of dividend LP Seckon 126) Note] 2 50 auitorised by AOA, USL. the company (an pay the dividend in Some Imp Points | in cath Dividend Any other clectonic MOF iN kind” warvanr ModeFP Declared dividend must be paid to the enttied Sharthoiders within 30 days from date af declaration of dividend If paid by issuing dividend warrant, Such Wovrants Shall be posted within 30 days One posted, ii immateiay whether Same is received within 30 days or nor % Bonus shares cannot pe issued fn lieu of dividend * Me@ KCEETION 70 OMPAN TP dividend is not daimed within 30 days date df declaration, fhe amaynt OF dividend ayable ay. he aid yng tha PR Yo the ean of the member. From # Prohibition on declaration of dividend Paohibition ty case Peohibition in care of OF defaulting Gmpany. Companies ke + Company having Hicense uly 8 ohidited From payi seuion 43 Section 34 aiden psy Company Fai +0 comply with ¥ Repayment OF depos! alUnpatd dividend Account Wy where dividend has been declared by company but has not been paid ov claimed within 30 days From date of declaration OF dividend then Company Shall within 9 days From expiry of 30 days transfer the total amourt_of intl or unclaimed dividend 4o__Specsal_Account called as apis shall be opened tn 9 Scheduled bank by company. 2) Within 90 days, from date oF twanstering amount to UDA, Company shalt prepare q statement conjaining ames. ast Known Amount of address Unpald dividend Website oF Company, and place on =6 Dod Website approved by Co 31 Default made in transferring amount to UDA, Company shall fiom date of defuuit shall pay Snéezest “@ai pa On Amount pot so fransferred L The Tntevest accruing thereon shall be avatable jo benefits OF the members. tm proportion to Qmount vepaid to them.4) A penon iho fs entitled to xeccive the dividend MAY apply to the company COneerned For payment of dividend . if such unclaimed dividend has been ivanstevred jo UDA by company 5) Money toansferrtd to UDA , Wihidy yemains unpaid For F years From date of transfer Shall be Hafuferved to TEPF along with iDtertsr v Tn Return, the Company as evidence of such ‘teanifer. ©) Dividend on Shaves —9 not paid) for consecutive Fysars Or Most, such Shares shalt be transfer fo TEP. Explatnahy 1k is clarified that $n cate any clividend is paid or claimed the shaves Shall nok be transfered to 1EPF + Monber may after following pesmibed Proctdure and 09 submission oF preswibed documents may _yeclsim the Shaves $0 frdMfened to TePe* PUNT eNT ComPany OFFicey tn default J one lakh Rupees Twenty five thousand + (and) + (and) in case af continuing fetluve in case OF continuing Penalty of five hundved defautt with futher Rupees for each day Penalty F100 Rs- during which default for eath day dwing Continues Uphith Such defaylt tontinus, ‘* Subject fo Man 10 Lakhs ASUbjeck hy Maa. 2 (aKNi (CY Beirea der — 30 Dove iden Not a Clie Toe ey Interest @) Senoverns Po seine a icra | eet 90 Dove H - toement ons Lashom | q Unpaid dard anc) — enh Sey] WebsTeoF | oye | Website approved by | Siting” Neemoeny "SS | on fr tispoese rsfer umpai/unclaimed dividend olan with interest to IEPRight oF dividend, Right Shaves and Bonus Shases fo be held ia Abeyance, Pending Registration of Transfer OF Shares Tf gnstrument of transfer of Shares hos been deltevencd by & sharcholder for Regittration and tanifer of such Shaves hosthe Company Shall fotiowing Steps — (Wawifes the dividend in xelaton keep in Abeyance, Qny offer of eight to such Shares to (UD) upless ts authorised by the Ys cde), Registered Shareholder of such and ny $3 Fully Share in Writing 40 pay JUCh dividend to the transferee specified in the Tnsteument of transfer. Punishment for Failure 4o\pay suth dividend After declavation oF dividend: the company shall within 30 days of such declaration pay 40 #he sharthorders ox post dividend warwant within 30 days. % Posting OF dividend warrant Within 30 days absolves the company from 7 Panshmeny eapece ot ov Not. The Offence 13 Committed only when the company Fain. to port the same fo rqutered addren Of member within Bo days.«Punishment fox Faituse ~ 1F fair 40 pay dividend o» post dividend warrant, following _punishmend - Divector Company L Every director Shall be punishable Company Shall be with Imprisonment of upto liable 40. pay Hwo years, Th he 1 knowingly Simple interest “party to the default QM ding Aad athe period for shall asd be liable 40 pay “which default continues. minimum Fine oF Z Joao For cvery day, during which Suh default continues: varie] [Exemenon foR PuNasHrenT] Under foilowing cascs, where the company has fatled to pay dividend within 30'days of declaakun, No offence shall be deemed +0 have been committed and thus, no Q) Where the dividend could Not be paid by reason ok the gpewution OF any law. -Sharcholder hay given directions to Company regarding the payment of dividend and —thare divettion, Cannot be Complied with and the ©) Whee there is Chpuke regarding the wight 40° “atecive the dividend 4) Where dividend har been lawfully Gdjutied by the Company against ny Sum due to i+ from Shavthubie©) Where for any other reason, the failure to pay the dividend Or to post the warrant within prescribed period of 30 days was Mot due to any default on He _part_af company + [Bppiicasiliny oF Seofon 2940 Nidhi] Tred In cae dividend payable to member ts 2100 Ov les, = iF Shall be suffrdent iF declaration of dividend i newspaper Gad announcement of ihe said declaration H4 Gbo dsplayed on the native board of Nidhis For at least 3 months.