Q. In case of voluntary winding up of a small private company, is it mandatory to distribute as dividend, the balance lying in Reserves?

Question

Is it not possible that all liabilities are cleared before winding up but the 'reserves and surplus' and "paid-up capital" paid to the shareholders, as total amount returned, but nothing as "dividend"?

Answer 1

Reserve and surplus could be dividend as per s. 2(22)(c). Also check s. 46 for liquidation