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Study the following case/situation and express your opinion : ABC Co. Ltd. decides to pay Interim Dividend Can it be paid out of free reserves? - Secretarial Practice

Answer in Brief

Study the following case/situation and express your opinion :

ABC Co. Ltd. decides to pay Interim Dividend

  1. Can it be paid out of free reserves?
  2. Is the Board right in declaring the same at the Board Meeting?
  3. Can the company distribute the same within 30 days of its declaration?
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Solution

  1. No, Interim Dividends cannot be paid out of free reserves. Interim Dividend is declared out of profits of the current accounting year.
  2. Yes, the Board of Directors has the power to decide and declare the same at the Board Meeting.
  3. Yes, the company should distribute the interim dividend within 30 days of its declaration.
Concept: Interim Dividend
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APPEARS IN

Balbharati Secretarial Practice 12th Standard HSC Maharashtra State Board
Chapter 10 Dividend and Interest
Exercise | Q 3.2 | Page 156
SCERT Maharashtra Question Bank 12th Standard HSC Secretarial Practice Maharashtra State Board 2021
Chapter 10 Dividend and Interest
Study the following case/situation and express your opinion | Q 1
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