Declaration of Dividends by Companies – Legal Guide on Section 123

While the partners in a partnership firm or LLP distribute profits in terms of a predetermined profit-sharing ratio, the distribution of profits in the case of Companies is slightly different. Companies distribute profits by declaring dividends to the Shareholders of the Company. Declaration of dividends is an appropriation of profit that is arrived after providing for all expenses including interest. Above were the explicit provisions governing the dividend declaration by Indian companies and their payment. In case you need any assistance, feel free to contact the ASC Group.