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Which one of the following statements regarding declaration of dividend by a company under the…

Section 123 directs payment of a share dividend to its registered shareholder, to that shareholder's order, or to the shareholder's banker. It does not generally authorise…

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Which one of the following statements regarding declaration of dividend by a company under the Companies Act, 2013 is NOT correct ?

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Correct answer D

Section 123 directs payment of a share dividend to its registered shareholder, to that shareholder's order, or to the shareholder's banker. It does not generally authorise payment to both registered and non-registered shareholders merely because they claim the shares. Dividend may come from qualifying profits or government-guaranteed funds; drawing on reserves is restricted to free reserves and the applicable conditions.

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