GOLD Co. Ltd. declares a dividend of ₹10/- per share for F.Y. 2019-2020 :(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 Accoun…

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

(a) Yes. A declared dividend must be paid (or the warrant posted) within 30 days of declaration. Failure makes the company and its directors liable for default and penalty under Section 127 of the Companies Act, 2013.

(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), not to the Debenture Reserve Account.

(c) No. The amount is transferred to the IEPF (Investor Education and Protection Fund) only if it remains unpaid or unclaimed for seven years from the date of transfer to the Unpaid Dividend Account.