Consequences of non transfer of unpaid declared dividend

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Under Section 205A a dividend which has not been paid or claimed within  30 days from the date of declaration must be transferred within 7 days from the date of expiry of the said period of 30 days. every company must transfer the balance of the Dividend account to a special account called "Unpaid Dividend account".

What are the consequences to be faced if the company does not transfer the Unpaid declared dividend to Unpaid Dividend account? Whether their is any measure to be followed in the following case?

Replies (5)

Hello!

Refer sec 205A (4) in which penalty is given for default of Sec 205A.

 

Regards

Nidhi

The Company will have to pay interest @ 12% and fine upto Rs. 5000 for every day during which the default continues.

In practice, the bank do not trf. the fund to a new a/c. they simply change the name of the a/c., hence u need to ask the banker to change the name of the a/c.
 

Agree....

 

I also use same practice...

usually the change of name is mentioned at the time of opening of bank account. Alternatively, you can send a separate BR for the same.

it is better that u mention in the same resolutione to open the bank a/c. and trf. the fund on the stipulated dt. to the unpaid/unclaimed dividend a/c. hence, the bank will do the rest.


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