Dividend and Interest — Secretarial Practice STD 12 Commerce / Arts — Question
Maharashtra BoardEnglish MediumSTD 12 Commerce / ArtsSecretarial PracticeDividend and Interest4 Marks
Question
Unpaid dividends cannot be used by the company.
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Answer
The dividend declared by the company but has not been paid to or claimed by a shareholder within 30 days of its declaration is termed as an unpaid dividend.
The total amount of dividend which remains unpaid should be transferred to ‘Unpaid Dividend Account’.
Any amount in the Unpaid Dividend Account of a Company that remains unpaid/unclaimed for a period of 7 years will be transferred to ‘Investors Education and Protection Fund’.
The company cannot use unpaid dividends. The only claimant of money can claim for it by following certain procedures.
Thus, it is rightly said that unpaid dividends cannot be used by the company.
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