Declaration and Payment of Dividend under Companies Act 2013, has been enacted for distribution of profit among shareholders of the company. Under Section 205 of the Companies Act, 2013[1] contains the regulations for the declaration and distribution of dividend. According to law, it is mandatory for every company having share capital that makes a profit to declare and distribute a dividend to its shareholders. The dividend which includes interim dividend can be paid out of the current profits or from accumulated profits. Before the declaration of the dividend, it must be assured that depreciation for the whole year has to be provided and for this purpose, it is required for the board to approve unaudited financial statements and the amount is needed to be transferred to reserves. To declare a dividend, a separate bank account is required to be opened where the amount of the dividend is to be transferred within 30 days of the declaration.

Saket Kumar

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