DONALD Company Ltd. declares a dividend of ₹10/- per share for F.Y. 2024-25.(a) Is company under default, if dividend was not paid within 30 days of its declaration?(b) Is company right in transferring the unpaid dividend to its Debenture Reserve Acc…

Answer: (a) Yes (b) No (c) No

(a) Yes. As per Section 127 of the Companies Act, 2013, declared dividend must be paid (or the warrant posted) within 30 days of declaration. Failure to do so is a default, for which the directors and the company are liable to penalty, along with interest on the delayed amount.

(b) No. Within 7 days after the expiry of the 30 days, the unpaid or unclaimed dividend must be transferred to a special account called the Unpaid Dividend Account opened in a scheduled bank (Section 124). It cannot be transferred to the Debenture Reserve Account.

(c) No. Money lying in the Unpaid Dividend Account is transferred to the Investor Education and Protection Fund (IEPF) only if it remains unpaid or unclaimed for a period of 7 years from the date of transfer to that account, not after 30 days.