Definition of reserves clarified as free reserves for profit transfer and dividend declaration under company law. The circular clarifies that the term reserves in the Transfer of Profits to Reserves Rules under section 205(2A) means only free reserves, requiring that amounts treated as reserves for dividend declaration and mandated transfers be unrestricted and distributable.
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Provisions expressly mentioned in the judgment/order text.
Definition of reserves clarified as free reserves for profit transfer and dividend declaration under company law.
The circular clarifies that the term reserves in the Transfer of Profits to Reserves Rules under section 205(2A) means only free reserves, requiring that amounts treated as reserves for dividend declaration and mandated transfers be unrestricted and distributable.
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