TMI BlogCORPORTAE ACCOUNTABILITY – III – DIVISIBLE PROFITS AND DIVIDENDSX X X X Extracts X X X X X X X X Extracts X X X X ..... Both interim and final dividend when declared become debt and are payable within 30 days of declaration Section 78 Where a company issues securities at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those securities shall be transferred to an account, to be called "the securities premium account"; and the provisions of this Act relating to the reduction of the securities capital of a company shall, except as provided in this section, apply as if the securities premium account were paid-up securities capital of the company. Section 78 does not permit the amount standing to the credit of the Securities Premium Account to be distributed by way of dividend to the share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eserve - Section 205(2A) No dividend shall be declared or paid by a company for any financial year out of the profits of the company for that year arrived at after providing for depreciation in accordance with the provisions of sub-section (2), except after the transfer to the reserves of the company of such percentage of its profits for that year, not exceeding ten per cent, as may be prescribed: Provided that nothing in this sub-section shall be deemed to prohibit the voluntary transfer by a company of a higher percentage of its profits to the reserves in accordance with such rules as may be made by the Central Government in this behalf. Unpaid dividend to be transferred to special dividend account Section 205A.(1) Wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of the company Section 205(3) Dividend not to be paid except to registered shareholders or to their order or to their bankers Section 206 Right to dividend, rights shares, and bonus shares to be held in abeyance pending registration of transfer of shares Section 206A Penalty for failure to distribute dividends within thirty days Section 207 Every director of the company shall, if he is knowingly a party to the default, will be punishable with simple imprisonment for a term which may extend to three years and shall also be liable to a fine of one thousand rupees for every day during which such default continues and the company shall be liable to pay simple interest at the rate of eighteen per cent per annum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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