Question

Answer in brief.

Discuss the rules governing unpaid and unclaimed dividend.

Answer 1

The dividend which is declared by company but has not been paid by it or claimed by a shareholder within 30 days of its declaration is termed as Unpaid and Unclaimed Dividend, respectively. The rules that govern Unpaid/Unclaimed dividend are as follows:

1. UNPAID DIVIDEND ACCOUNT- (Unpaid / Unclaimed Dividend) Total amount of dividend which remains unpaid/unclaimed should be transferred to ‘Unpaid Dividend Account’ opened in a scheduled Bank by the company.
2. TIME LIMIT FOR TRANSFER- This transfer should be made within 7 days from the end of 30 days within which the payment was to be made. In other words, this transfer should happen within 37 days from the declaration of dividend. 
3. STATEMENT ON A WEBSITE- Within 90 days of transfer of amount in the ‘Unpaid Dividend Account’, the company is required to put on its website or any other website as approved by the Central Government, a statement which shows names, last known addresses and unpaid amount payable to each shareholder.
4. CLAIMING UNPAID DIVIDEND- Any claimant to the Unpaid Dividend Account may apply to the company for the payment of money claimed. 
5. TRANSFER TO IEPF- Any amount in the Unpaid Dividend Account of a company which remains unpaid/ unclaimed for a period of 7 years from the date of such transfer shall be, transferred by the company to ‘Investors Education and Protection Fund’ (IEPF).
6. CLAIM FROM IEPF- The claimant of money will have to follow the procedures and submit necessary documents to get claim from IEPF along with a statement in the prescribed form which gives details of such transfers.