Question

Study the following case/situation and express your opinion: 

GOLD Co. Ltd. declares a dividend of ₹ 10/- per share for F.Y. 2018-19.

1. Is company under default, if the dividend was not paid within 30 days of its declaration?
2. Is company right in transferring the unpaid dividend to its Debenture Reserve Account? 
3. Does the company have to transfer the amount of unpaid dividends to IEPF after 30 days?

Answer 1

1. Yes, the company is in default if the dividend is not paid within 30 days of its declaration.
2. No, the company is not right in transferring the unpaid dividend to its Debenture Reserve Account. It should be transferred to the Unpaid Dividend Account. It is a separate bank account opened in a scheduled bank within 5 days of its declaration.
3. No, any amount in the unpaid dividend account of a company that remains unpaid/unclaimed for a period of 7 years from the date of such a transfer, should be transferred to (IEPF), ‘Investors Education and Protection Fund’.