According to the provision of The Companies Act 1956. Companies registered under this act can declare divided out of
1. Profit of the current year arrived at after providing for the depreciation of the financial year, dividend proposed to be declared.
2. Profit of the previous year arrived at after providing for the depreciation of the financial or preceeding financial year or years.
3. Money's offered by the central government or state government in pursuance of the guarentee offered by such government.
Dividend can also be declared out of the accumulated profit, but subject to the following conditions:
1. Dividend declared during the financial year shall not exceed the average dividend of 5 years dividend, preceeding the financial year, dividend proposed to be declared.
2. Accumulated profit withdrawn for the declaration of dividend, shall not exceed 1/10th of the total paid up capital and accumulated reserves.
3. Such reserve on account of withdrawal, shall not reduce below 15 percent of total paid up capital.
1. Profit of the current year arrived at after providing for the depreciation of the financial year, dividend proposed to be declared.
2. Profit of the previous year arrived at after providing for the depreciation of the financial or preceeding financial year or years.
3. Money's offered by the central government or state government in pursuance of the guarentee offered by such government.
Dividend can also be declared out of the accumulated profit, but subject to the following conditions:
1. Dividend declared during the financial year shall not exceed the average dividend of 5 years dividend, preceeding the financial year, dividend proposed to be declared.
2. Accumulated profit withdrawn for the declaration of dividend, shall not exceed 1/10th of the total paid up capital and accumulated reserves.
3. Such reserve on account of withdrawal, shall not reduce below 15 percent of total paid up capital.
