5%
2.50%
10%
7.50%
Answer is Right!
Answer is Wrong!
The correct answer is: A. 5%
Section 205(2A) of the Companies Act, 2013 states that a company is obliged to transfer at least 5% of its net profit to the reserve fund, if the rate of dividend is more than 20% of the paid up capital.
The other options are incorrect because they do not reflect the requirements of Section 205(2A). Option B is incorrect because it is less than the required 5%. Option C is incorrect because it is more than the maximum dividend rate of 20%. Option D is incorrect because it is not a percentage.
I hope this helps! Let me know if you have any other questions.