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    Question

    No dividend  shall be declared or paid by a company for any financial year except_____

    A Out of the profits of the company for any previous financial year Correct Answer Incorrect Answer
    B Out of the profits of the company for that year arrived at after providing for depreciation Correct Answer Incorrect Answer
    C Out of money provided by the Central Government or a State Government in pursuance of a guarantee Correct Answer Incorrect Answer
    D All a or b or c Correct Answer Incorrect Answer
    E Either a or b Correct Answer Incorrect Answer

    Solution

    Section 123.Declaration of dividend: (1) No dividend shall be declared or paid by a company for any financial year except— (a) out of the profits of the company  for that year arrived at after providing for depreciation in accordance with the provisions of sub-section (2), or out of the profits of the company for any previous financial year  or years arrived at after providing for depreciation in accordance with the provisions of that sub-section and remaining undistributed, or out of both or; both or (b) out of money provided by the Central Government or a State Government for the payment of dividend by the company in pursuance of a guarantee given by that Government.

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