Answer in Brief
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?
- Is the Board right in declaring the same at the Board Meeting?
- Can the company distribute the same within 30 days of its declaration?
- No, Interim Dividends cannot be paid out of free reserves. Interim Dividend is declared out of profits of the current accounting year.
- Yes, the Board of Directors has the power to decide and declare the same at the Board Meeting.
- Yes, the company should distribute the interim dividend within 30 days of its declaration.
Concept: Interim Dividend
Is there an error in this question or solution?