BUSINESS LAW

REKHA SHINDE (Querist) 11 March 2010 This query is : Resolved
A tea company desires that dividend be paid by way of free supply of packets of tea. is it valid?

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B K Raghavendra Rao (Expert) 11 March 2010
A dividend is a share of profit in terms of hard cash. Dividend has to be paid only in terms of cash/currency. Tea packets may amount to gift.

Raj Kumar Makkad (Expert) 11 March 2010
If tea packets are valued in terms of monney (which is generally made) then it is also a cash divident.

Rajeev (Expert) 11 March 2010
Yes it is valid, Mr Makkad is right if the tea packets r valuedin terms of money.

A V Vishal (Expert) 11 March 2010
According to the Companies Act, 1956 & SECRETARIAL STANDARD ON DIVIDEND issued by ICSI, dividends should be paid only in cash and not in kind.