Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
CGST - Acts + GST Rates GST Ntf. GST Forms GST - Manual GST - FAQ State GST Acts SGST Ntf. I. Tax Manual
Extracts
Home List
← Previous Next →

Dividend

SS - Old - 03 - Rule - Companies Law - SS - Old - 03 - SS-3 Secretarial Standard on The following is the text of the Secretarial Standard-3 ( SS-3 ), issued by the Council of the Institute of Company Secretaries of India on . In the initial period, adherence by a company to this Secretarial Standard will be recommendatory. In this Secretarial Standard, the Standard portions have been set in bold (here in italics) type. These should be read in the context of the background material, which has bee .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ot . In commercial usage, the term refers to the share of the profits of a company that is distributed amongst the members of the company. The term has been inclusively defined in the Companies Act, 1956 ( the Act ), to the effect that it includes interim . The Act neither specifically defines the term nor makes any distinction between interim and final . Scope The principles enunciated in this standard for relate to under the Act and are governed by the provisions of sections 205, 205A, 205B, 2 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Act, 1961, and any other statute would, in addition, be applicable as set out in that statute/legislation. The principles set out herein relate to both equity as well as preference share capital in accordance with the provisions of sections 85 and 86 of the Act. While the principles generally relate to final , certain principles also apply to interim declared by the Board of directors, as stated hereinafter. Further, the principles set out herein are in respect of as it relates to a going concer .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ding, where they apply, the Regulations contained in the Tables in Schedule I to the Act. Board or Board of directors means the Board of directors of a company. means a distribution of any sums to members out of profits or reserves available for the purpose and, in the context of this Standard, refers to recommended by the Board and declared by members, i.e., final . Free Reserves means reserves the utilisation of which is not restricted in any manner. Interim means the declared in a meeting of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

amount at a fixed rate and, in respect of capital, to repayment of capital. Shareholder means a member as defined above and, where the context requires or admits, includes preference shareholder. Words and expressions used but not defined herein shall have the meaning respectively assigned to them under the Act. References herein to sections and regulations relate, respectively, to sections of the Act and regulations of Table A of the Act, unless otherwise stated. Secretarial Standards 1. Ascer .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Act. The Act requires a company to prepare a profit and loss account which should give a true and fair view of the profit or loss of the company for a financial year. The Act does not define the word profit or the expression true and fair . These words and expressions should, therefore, be understood in their natural and proper sense. This would imply that the profit and loss account should be prepared and presented in conformity with the requirements set out in the Act and the generally accept .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

previous year(s) with the prior permission of the Central Government. 1.1-2 Before declaring out of profit for the year, any loss for the previous year(s) or the amount of depreciation for the previous year(s), whichever is less, should be set off against such profit. The Act provides that in case a company has incurred loss in any previous financial year or years, the amount of loss or an amount which is equal to the amount provided for depreciation for that previous financial year or those pre .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of profit earned prior to the incorporation of the company. should be declared only out of profits, free reserves or out of moneys provided by the Central Government or State Government for this purpose in pursuance of a guarantee given by such Government. The Act does not permit payment of out of the securities premium account. Revaluation reserve and amalgamation reserve are not profits of the business nor are they created out of such profits, and hence cannot be applied in the payment of . P .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ble. However, the company would not, in such a case, be required to comply with the Companies (Declaration of out of Reserves) Rules, 1975. The Companies (Transfer of Profits to Reserves) Rules, 1975 only apply to equity and to that portion of relating to participating preference shares which is in excess of the fixed rate of preference . 1.1-5 Interim , if declared, is payable out of estimated profit for the period for which interim is to be declared, after taking into account depreciation for .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ncial statements so prepared should take into account depreciation for the full year, taxation including deferred tax and other anticipated losses for the year. The interim financial statements should also take into account the that would have to be paid at the contracted rate on preference shares. The Board should also take into account the specified percentage required to be transferred to reserves, before declaration of interim . Such transfer should be effected while preparing final accounts .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

depreciation for the full year and arrears of depreciation, taxation including deferred tax, transfer to reserves, on preference shares issued, if any, and other anticipated losses for the year. Where a company has issued equity shares with differential rights as to voting, no differentiation should be made in the declaration of interim on equity shares. Standards 1.1.1, 1.1.2 and 1.1.3 shall also apply to interim . 1.2 Out of reserves 1.2-1 In a year in which the profits are inadequate or there .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the Central Government. The maximum rate of that may be declared from reserves in terms of the Companies (Declaration of out of Reserves) Rules, 1975, is ten per cent of paid-up capital while the Companies (Transfer of Profits to Reserves) Rules, 1975 become applicable only in respect of declaration of at a rate exceeding ten per cent. Hence, any company, which draws from its reserves to pay , will not be required to make any appropriation to reserves in terms of the Companies (Transfer of Prof .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he Board nor by way of a resolution passed by circulation. Unless the has been recommended by the Board, members in general meeting cannot on their own declare any . Where a company has an audit committee, this committee should consider the financial statements before submission to the Board. should be recommended by the Board after consideration and approval of the financial statements. All requisite approvals should be obtained before declaration of . should not be declared subject to any cond .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ount or rate of recommended by the Board. 2.3 No should be declared on equity shares for previous years in respect of which annual accounts have already been adopted at the respective AGM. Arrears of preference on cumulative preference shares for previous years may, however, be declared and paid. 2.4 Interim should be declared by the Board, at a meeting of the Board. Declaration of interim should not be made by a committee of the Board nor by way of a resolution passed by circulation. While fina .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

permit the issue of irredeemable preference shares, where a company had issued redeemable preference shares but has failed to redeem them on the due date, no should be declared on equity shares until such failure has been remedied. Standard 2.5 shall also apply to interim . 3. Entitlement to 3.1 Only the registered holders of shares are entitled to . should be paid (i) in respect of shares held in electronic form, to those persons whose names appear as beneficial owners in the statement(s) furni .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ts. 3.2 Preference shareholders should be paid before is paid to the equity shareholders of the company. Preference shares carry a preferential right as to in accordance with the terms of issue and the articles. However, this right is subject to the availability of distributable profits. If there are two or more classes of preference shares, the holders of the class which has priority are entitled to their preference before any is paid in respect of the other class, if the terms of issue so prov .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mulative preference shares can be paid in a later year where there are profits to justify such payment. In the case of non-cumulative preference shares, if no can be paid in a year, there is no right to receive it in future years. After paying the preference and any arrears of on cumulative preference shares, residual profit may be utilised for payment of to equity shareholders. However, where participating preference shares have been issued, the holders thereof also have the right to participat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

but which have not been registered for any valid reason should be transferred to unpaid account. If a member authorises the company in writing to pay the to the transferee specified in the instrument of transfer, the company should act upon such authorisation. However, in the case of shares which have not been transferred because the ownership thereof is in dispute, or where attachment/prohibitory orders have been passed by a court or statutory authority, should be held in abeyance by transferri .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

redited to the bank account of the member in terms of a mandate given by the member. The cheque or warrant or demand draft or pay order should be sent to the registered address of the member and, in the case of joint holders, to the registered address of the person named first in the register of members or to such person or to such address as the member or the joint holders have directed, in writing. 5.3 Initial validity of the warrant should be for three months. A cheque or warrant for payment .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

warrant should be entered in a register of revalidated warrants indicating the name of the person to whom the warrant is issued, the number and amount of the warrant and the date of revalidation. 5.4 A duplicate warrant should be issued only after the expiry of the validity of the warrant and the reconciliation of the paid amounts thereof. In case the original instrument is not tendered to the company, a duplicate warrant should be issued only after obtaining requisite indemnity/declaration fro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f issue of such duplicate warrant. 5.5 The warrant must be accompanied by a statement in writing showing the amount of paid and the amount of tax deducted at source, if any. Where a tax on distribution of is not levied on the company but income-tax is required to be deducted at source from payable to members, a tax deduction certificate, in the prescribed form, should be issued to the members to whom has been paid after deduction of income-tax at source at the applicable rates. Even where paymen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

are issued on terms providing that they shall rank for as from a particular date, on such shares should be paid accordingly. 5.7 Calls in arrears and any other sum due from a member may be adjusted against payable to the member. In the case of listed companies, calls in arrears or any other sum due from a member in the capacity of a member may be adjusted against the payable to him after giving such notice, as may be required. In the case of other companies, unless the articles provide otherwis .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tails of unpaid or unclaimed and reconcile the amounts thereof with the concerned bankers, periodically. 6.2 Any amount in the unpaid account of the company which remains unclaimed and unpaid for a period of seven years from the date of transfer of such amount to the unpaid account should be transferred to the Investor Education and Protection Fund. Any transfer to the Investor Education and Protection Fund should be made within thirty days of the expiry of seven years from the date of transfer .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

such amounts. Hence, the company should intimate the concerned members individually of the amount of remaining unclaimed which is liable to be transferred to the Investor Education and Protection Fund and advising the member to claim such amount of from the company before such transfer. 6.4 Any interest earned on the unpaid account should be transferred to the Investor Education and Protection Fund. If the unpaid account is kept as a fixed deposit or in any account on which interest is earned, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version