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    Question

    As per Companies Act, 2013, out of which of the

    following reserves can a company declare dividend?
    A out of the profits of the company for the current year Correct Answer Incorrect Answer
    B out of the profits of the company for any previous financial year or years Correct Answer Incorrect Answer
    C Out of money provided by Govt. in pursuance of any guarantee given Correct Answer Incorrect Answer
    D A and B Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    As per Companies Act, 2013 Section 123 (Declaration of dividend) and Company (Declaration and Payment of Dividend) Rules, 2014, company should declare dividend out of a.    out of the profits of the company  for that year arrived at after providing for depreciation or b.    out of the profits of the company for any previous financial year  or years arrived at after providing for depreciation and remaining undistributed, or c.    Out of both d.    Out of money provided by Govt. in pursuance of any guarantee given

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