Declaration of dividend from reserves: permitted under limits on rate and drawal, with reserve floor and authentication requirements. Declaration of dividend out of reserves is allowed when current profits are inadequate, subject to limits: the dividend rate may not exceed the lesser of the average rate declared in the preceding five years and a capped share of paid-up capital; total drawal from accumulated past profits transferred to reserves is restricted to one-tenth of paid-up capital plus free reserves and must first set off current year losses; reserves must not fall below fifteen percent of paid-up capital. The rule defines qualifying accumulated profits and prescribes electronic or physical filing and authentication requirements.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Declaration of dividend from reserves: permitted under limits on rate and drawal, with reserve floor and authentication requirements.
Declaration of dividend out of reserves is allowed when current profits are inadequate, subject to limits: the dividend rate may not exceed the lesser of the average rate declared in the preceding five years and a capped share of paid-up capital; total drawal from accumulated past profits transferred to reserves is restricted to one-tenth of paid-up capital plus free reserves and must first set off current year losses; reserves must not fall below fifteen percent of paid-up capital. The rule defines qualifying accumulated profits and prescribes electronic or physical filing and authentication requirements.
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