Reserve transfer requirement conditions dividend declaration; higher dividends trigger larger mandated transfers from company profits to reserves. A company shall not declare or pay a dividend out of the profits for a financial year, after providing for depreciation, unless a specified percentage of those current profits is transferred to reserves. The rule prescribes increasing minimum reserve-transfer percentages tied to successive higher bands of the proposed dividend measured against the paid-up capital, with the largest mandated transfer when the proposed dividend exceeds the top band.
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.
Reserve transfer requirement conditions dividend declaration; higher dividends trigger larger mandated transfers from company profits to reserves.
A company shall not declare or pay a dividend out of the profits for a financial year, after providing for depreciation, unless a specified percentage of those current profits is transferred to reserves. The rule prescribes increasing minimum reserve-transfer percentages tied to successive higher bands of the proposed dividend measured against the paid-up capital, with the largest mandated transfer when the proposed dividend exceeds the top band.
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