DECLARATION OF DEVIDEND

[Kajal Mehta]

CAN DEVIDEND DECLARED OUT OF GENERAL RESERVE?

 

[CAGOPALJI AGRAWAL]

It can be done subject to the Companies (Declaration out of reserves) Rules 1975.

AI Summary

Dividend declaration from general reserves permissible where companies comply with applicable declaration-out-of-reserves rules and conditions. Dividends may be declared out of a company's general reserve provided the company complies with the Companies (Declaration out of reserves) Rules and the conditions those Rules prescribe regarding the source, authorisation, recording, and procedural requirements for utilising reserves for distribution.