During the financial year 2016-17, Perfect Limited declared an interim dividend for the second time. After the
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Question:
During the financial year 2016-17, Perfect Limited declared an interim dividend for the second time. After the declaration, the Board of Directors decided to revoke the second interim dividend as its financial position was poor, to accommodate the said interim dividend.
(i) Examine the validity of the Board’s decision under the provisions of the Companies Act, 2013.
(ii) Examine what will be your answer, if the Board proposes to transfer more than 10% of the profits of the company to the reserves for the current year before the declaration of any dividend?
Related Book For
Intermediate Accounting
ISBN: 978-0071339476
Volume 1, 6th Edition
Authors: Beechy Thomas, Conrod Joan, Farrell Elizabeth, McLeod Dick I
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