Payment of dividend to shareholders who are untraceable now

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 January 2013 Issue: A company is paying dividend to its shareholders including ones who are untraceable. Therefore a certain amount is transferred to Unpaid Dividend Account.. This amount is then transferred to Investor Education and Protection Fund

I need to know what remedy does the company have in such situation.

1. Can the company stop paying dividend to such shareholders as the amount eventually gets transferred to IEPF
2. Can the shares be forfeited & reissued to others.

Amol S Joglekar

Amol S Joglekar (Expert)

17 January 2013 01. Payment of dividend can not be stopped merely because of IEPF.
02. Forfeiture falls under a separate section and same may be followed to proceed on to forfeit the shares.

Querist : Anonymous

Querist : Anonymous (Querist)

29 January 2013 Thanks a lot..

Regarding the question on forfeiture, on inquiry, I was informed that forfeiture can be done when the shareholders do not pay the called up amount on partially paid shares.

In the given case shares are fully paid and are untraceable. I wanted to know if the company can proceed to forfeit the shares without intimation to the shareholders even when their shares are fully paid.

Amol S Joglekar

Amol S Joglekar (Expert)

29 January 2013 01. Fully paid up shares can NOT be forfeited.
02. IEPF itself is a good remedy.

Querist : Anonymous

Querist : Anonymous (Querist)

05 February 2013 Thank a lot

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