Divisible profits definition
Divisible profits means the profits which the law allows the company to distribute to the shareholders by way of dividend. According to Palmer’s Company Law, the terms ‘divisible profits’ and ‘profits in the legal sense’ are synonymous. The profits of a business mean the net proceeds of the concern after deducting the necessary outgoings without which those proceeds could not be earned. [Bharat Insurance Co. Ltd. v. CIT (1931) 1 Com Cases 192, 196 (Lah)].