According to Palmer's Company Law, what are "divisible profits"?

Profits that can be divided among shareholders

Profits that are retained within the company

Profits earned by the company's directors

What is the primary objective of distributing dividends in a company?

Increasing company's liabilities

Maximizing shareholders' wealth

What must a company do before declaring any dividend in a financial year?

Transfer a percentage of its profits to the reserves

Seek approval from the government

Conduct an audit of its financial statements

What conditions must be fulfilled before a company can declare a dividend out of accumulated profits?

The dividend must not exceed the average of the rates of the previous three years

The dividend cannot be declared if the company incurred losses in the previous year

The dividend must be less than 10% of the paid-up share capital

The dividend can only be declared if the company's reserves exceed 15% of its share capital

In case a company has incurred losses up to the end of the preceding quarter, what limitation applies to declaring interim dividends?

Interim dividends cannot be declared under any circumstances

Interim dividends cannot exceed the company's accumulated profits

Interim dividends must not be declared at a rate higher than the average dividends of the last three years

Interim dividends can only be declared if the company's reserves exceed 15% of its share capital

What is the purpose of the Investor Education and Protection Fund (IEPF)?

To provide loans to companies in need of financial assistance

To promote the company's profit distribution among shareholders

To provide funds for the protection and education of investors

To fund research and development projects

What is the consequence if a company fails to pay dividends within thirty days of their declaration?

The company is fined a fixed amount

Directors of the company are disqualified

Directors of the company may be imprisoned

The company's license is revoked

Under what circumstances can a declared dividend be revoked?

A declared dividend can be revoked with shareholder consent

A declared dividend can be revoked if the company faces financial difficulties

A declared dividend can be revoked by the company's directors

A declared dividend cannot be revoked once announced

Dividends and Audit- 1 Free MCQ Practice Test with Solutions

	Company Law 81 docs\|44 tests

	Company Law 81 docs\|44 tests

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