Skip to content

CS Executive · Company Law and Practice · Distribution of Profits

Kaveri Foods Ltd's Board declares a dividend on 10 March. Under the Companies Act, 2013, by when must the dividend amount be deposited in a separate account in a scheduled bank?

The dividend, including any interim dividend, must be deposited in a separate account in a scheduled bank within five days from the date of its declaration. The period runs from declaration, not from the meeting or the record date.

  1. AWithin five days from the date of declarationCorrect
  2. BWithin thirty days from the date of declaration
  3. CWithin five days from the date of the annual general meeting
  4. DWithin seven days from the date of record date

Explanation

Section 123(4) requires the dividend amount, including interim dividend, to be deposited in a scheduled bank in a separate account within five days from the date of declaration. The thirty-day option is incorrect and the period does not run from the AGM or record date.

Did you get it right without looking?

One question tells you little. A timed set on Distribution of Profits shows your real accuracy, how long you take and where you lose marks.

Practise Distribution of ProfitsFree diagnostic mock

More Distribution of Profits questions