07-23-2009, 06:54 PM
As per the co.1984 dividend must be declared out of profits of the company. now can someone guide me in determining whether in following cases dividend can be declared along with justification
1. If a company has loss for the year of Rs. 100,000 and accumulated profits of Rs. 1,000,000.assume all the profit of Rs. 1,000,000 is of revenue nature( no profit on sale of fixed assets etc)
2. If company has profit for the year of Rs. 100,000(All revenue nature) and accumulated losses of Rs. 1,000,000 and as a reult accumulated losses carried forward will be Rs. 900,000.
paid up capital of company is Rs.1,000,000 and directors want to pay dividend @ 10%
