SNM Ltd. was registered in 2021 with a share capital of 50 Lakh divided into 5 lakhs equity share of 10 each under Section 8 of the Companies Act,…
CA Foundation · Business Laws · MTP · September 2025
SNM Ltd. was registered in 2021 with a share capital of 50 Lakh divided into 5 lakhs equity share of 10 each under Section 8 of the Companies Act, 2013 for promotion of art in Jaipur. Company earned huge profits during the financial year ending on 31 st March, 2025 due to boom in the market. On 10 th May, 2025,75% members of the company demanded to distribute10% dividend to the equity shareholders. For this purpose, they passed special resolution in Extra Ordinary General Meeting. With reference to provisions of the Companies Act, 2013 decide whether SNM Ltd. can declare dividend @10% to equity shareholders for the year ending 31 st March, 2025.
Suggested Answer and Working Notes:
A contract which involves the use of personal skill or is founded on personal consideration comes to an end on the death of the promisor. As regards any other contract the legal representatives of the deceased promisor are bound to perform it unless a contrary intention appears from the contract (Section 37, para - 2). But their liability under a contract is limited to the value of the property they inherit from the deceased.
Topics: The Companies Act, 2013
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