RAS Bhd was incorporated in 1999. The company has suffered revenue losses exceeding RM10 million over the last three years. Karful, the managing director of RAS Bhd, seeks your advice on the following matters:
a) Explain whether RAS Bhd can pay a cash dividend to its members by utilising funds available in its share premium account?
b) Explain the legal position under the Companies Act 1965 , if it is discovered that RAS Bhd has paid a cash dividend out of capital?