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Under what circumstances can a company distribute dividends out of capital profits?
  • a)
    If the company has no outstanding debts.
  • b)
    If such distribution is authorized by the Articles of Association.
  • c)
    If the company's current profits are significantly higher than the previous year's profits.
  • d)
    If the company has excess cash reserves.
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
Under what circumstances can a company distribute dividends out of cap...
Capital profits can be distributed as dividends only if such distribution is authorized by the company's Articles of Association. This means that the company's internal regulations must explicitly allow for the distribution of capital profits as dividends to shareholders.
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Under what circumstances can a company distribute dividends out of capital profits?a)If the company has no outstanding debts.b)If such distribution is authorized by the Articles of Association.c)If the company's current profits are significantly higher than the previous year's profits.d)If the company has excess cash reserves.Correct answer is option 'B'. Can you explain this answer?
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Under what circumstances can a company distribute dividends out of capital profits?a)If the company has no outstanding debts.b)If such distribution is authorized by the Articles of Association.c)If the company's current profits are significantly higher than the previous year's profits.d)If the company has excess cash reserves.Correct answer is option 'B'. Can you explain this answer? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Under what circumstances can a company distribute dividends out of capital profits?a)If the company has no outstanding debts.b)If such distribution is authorized by the Articles of Association.c)If the company's current profits are significantly higher than the previous year's profits.d)If the company has excess cash reserves.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Under what circumstances can a company distribute dividends out of capital profits?a)If the company has no outstanding debts.b)If such distribution is authorized by the Articles of Association.c)If the company's current profits are significantly higher than the previous year's profits.d)If the company has excess cash reserves.Correct answer is option 'B'. Can you explain this answer?.
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