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CS Executive · Company Law and Practice · Distribution of Profits

A student preparing for CS Executive reads that Section 320 of the Companies Act, 2013 once dealt with distribution of property of a company. According to the official text of the Act on India Code, what is the present status of Section 320?

Section 320 on distribution of property of a company has been omitted by Section 255 and the Eleventh Schedule of the Act, with effect from 15 November 2016. It is no longer in force, so no present obligations arise under it.

  1. AIt is in force and governs distribution of property on winding up
  2. BIt has been omitted with effect from 15 November 2016Correct
  3. CIt has been substituted by Section 198 with effect from 12 September 2018
  4. DIt applies only to Section 8 companies

Explanation

The official text shows Section 320 (Distribution of property of company) as omitted by Section 255 and the Eleventh Schedule, with effect from 15-11-2016. It is therefore not in force. Section 198 deals with calculation of profits, not distribution of property, and was not a substitute for it.

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