Dividend interest

Co Act 2013 263 views 6 replies

In case dividend unpaid for 30 days and also not transfer to unpaid account within 7 days. Does interest as per sec 205A( 1956) and 127(2013) apply and interest of 18%+12%=30%

Replies (6)

You have to follow provisions of Companies Act, 2013 for Declaration of Dividend & payment thereof & accordingly provisions of section 127 would be applicable for such non-compliance

Originally posted by : abhishek agarwal
in case dividend unpaid for 30 days and also not transfer to unpaid account within 7 days.does interest as per sec 205A( 1956) and 127(2013) apply and interest of 18%+12%=30%

Section 127 of Companies Act, 2013 has clearly mentioned the penalty for failure to distribute dividends.

1. Directors if he is knowingly a party to default - Punishable with imprisonment which may extend to 2 years and with fine - Rs. 1000 for every day during which such default continues

2. Company -  Simple Interest @ 18% p.a during the period for which such default continues

Exception to this Provision

Provided that no offence under this section shall be deemed to have been
committed:—
(a) where the dividend could not be paid by reason of the operation of any law;
(b) where a shareholder has given directions to the company regarding the
payment of the dividend and those directions cannot be complied with and the same
has been communicated to him;
(c) where there is a dispute regarding the right to receive the dividend;
(d) where the dividend has been lawfully adjusted by the company against any
sum due to it from the shareholder; or
(e) where, for any other reason, the failure to pay the dividend or to post the
warrant within the period under this section was not due to any default on the part of
the company.

Originally posted by : abhishek agarwal
in case dividend unpaid for 30 days and also not transfer to unpaid account within 7 days.does interest as per sec 205A( 1956) and 127(2013) apply and interest of 18%+12%=30%

Section 127 of Companies Act, 2013 has clearly mentioned the penalty for failure to distribute dividends.

1. Directors if he is knowingly a party to default - Punishable with imprisonment which may extend to 2 years and with fine - Rs. 1000 for every day during which such default continues

2. Company -  Simple Interest @ 18% p.a during the period for which such default continues

Exception to this Provision

Provided that no offence under this section shall be deemed to have been
committed:—
(a) where the dividend could not be paid by reason of the operation of any law;
(b) where a shareholder has given directions to the company regarding the
payment of the dividend and those directions cannot be complied with and the same
has been communicated to him;
(c) where there is a dispute regarding the right to receive the dividend;
(d) where the dividend has been lawfully adjusted by the company against any
sum due to it from the shareholder; or
(e) where, for any other reason, the failure to pay the dividend or to post the
warrant within the period under this section was not due to any default on the part of
the company.

does 205A of co.act 1956 wont apply in relation to trf. to unpaid account

Dear Mr. Abhishek,

Section 124 of Companies Act, 2013 is not yet notified. Therefore Section 205A of Companies Act, 1956 still exists.

Regards,

Arjun Rajagopal

if 37 days completed and dividend unpaid and even not transfered to unpaid dividend account. .what sections would attract?.


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