Payment of dividend without opening separate bank account

[Deepti Jairaj]

Dear All,

[Deepti Jairaj]

Dear All,

In a private company there are 2 directors who are also shareholders holding 50% shares each. That company has declared final dividend and made payment by means of a cheque. No separate bank account was opened, but the dividend was within 30 days of the declaration at the AGM.

As section 205 says about a separate bank account to be opened for payment of dividend, what will be the consequence of this payment already made? What has to be mentioned regarding it in Clause No.13(2) of the Compliance Certificate to be prepared u/s 383 of the Act. 

Please share your views on this case.

Thanks and regards,
Deepti H Ganatra

On Monday, October 6, 2014 8:21:15 PM UTC+5:30, Deepti Jairaj wrote:

Dear All,

[Ramaswami Mohan]

we could modify the said para as under:

(ii). The Company has not deposited any amount in a separate Bank Account , though Dividend was declared and paid immediately after the AGM by means of crossed account payee Cheque to the 2 shareholders and the said Cheque was encased by the said shareholders on ......., i.e. on the 30th day after the dividend was declared and paid.

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CS. R.  Mohan
Mobile: 9908814677

[mgra...@gmail.com]

Hi

Act 2013 is very clear. PLS open another current account and call it as dividend account. Separate Bank account is required.

Gopal Rathnam

[Deepti Jairaj]

thank you 

[Deepti Jairaj]

Hi,

There is a slight change in my query posted earlier.

The company has given dividend by means of cheque, but the cheque is dated November, and the AGM was held in September, i.e., dividend is not paid within 30 days of declaration at AGM. No separate bank account is opened and no amount is transferred to unpaid dividend account also.

Please advise regarding clause No.13(2) & 13(3) to be mentioned in the compliance certificate for the company regarding dividend. I have copied the text of the clause below:

(ii) deposited the amount of dividend declared including interim dividend in a separate Bank Account on __________which is within five days from the date of declaration of such dividend.

(iii) paid/posted warrants for dividends to all the members within a period of 30 (Thirty) days from the date of declaration and that all unclaimed/unpaid dividend has been transferred to Unpaid Dividend Account of the Company with _________Bank on _____________.

Kindly share your views.

Thanks and regards,
Deepti H Ganatra

[mgra...@gmail.com]

Hi

1. After the commencement of F/Y 1.4.2014, company need not file Compliance certificate. If your query is about payment of Dividend after 1.4.2014, you have to adhere to section 123 of the Companies Act 2013.

2. If your query is about payment of Dividend prior to 1-4-2014 ( for the f/y ended 31-3-2013) then pls follow section 205 of the companies Act 1956. In this case compliance report for the y/e 31/3/2014 have state the facts.

Hope I understood your query and clarified.

Gopal Rathnam

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