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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.
- Is company under default, if the dividend was not paid within 30 days of its declaration?
- Is company right in transferring the unpaid dividend to its Debenture Reserve Account?
- Does the company have to transfer the amount of unpaid dividends to IEPF after 30 days?
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Solution
- Yes, the company is in default if the dividend is not paid within 30 days of its declaration.
- 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.
- No, it does not have to transfer the funds to the IEPF after 30 days. The immediate requirement after 30 days is to transfer the funds to the Unpaid Dividend Account within 7 days. The amount must only be transferred to the Investor Education and Protection Fund (IEPF) if it remains unpaid or unclaimed for a period of 7 years after being transferred to the Unpaid Dividend Account.
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- Is the company right in transferring the unpaid dividend to its Debenture Reserve Account?
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