Companies Act, 1956
Sec 205A - Unpaid
dividend to be transferred to special dividend account.
(1) Where, after the commencement of the
Companies (Amendment) Act, 1974 (41 of 1974), a dividend has been declared by a
company but has not been paid, or claimed, within thirty days from the date of
the declaration, to any shareholder entitled to the payment of the dividend, the
company shall, within seven days from the date of expiry of the said period of
thirty days, transfer the total amount of dividend which remains unpaid or
unclaimed within the said period of thirty days, to a special account to be
opened by the company in that behalf in any scheduled bank, to be called "
Unpaid Dividend Account of ........... Company Limited/Company (Private)
Limited ".
Explanation: In this sub-section,
the expression " dividend which remains unpaid " means any dividend
the warrant in respect thereof has not been encashed or which has otherwise not
been paid or claimed.
(2) Where the whole or any part of any
dividend, declared by a company before the commencement of the Companies
(Amendment) Act, 1974 (41 of 1974), remains unpaid at such commencement, the
company shall, within a period of six months from such commencement, transfer
such unpaid amount to the account referred to in sub-section (1).
(3) Where, owing to inadequacy or absence of
profits in any year, any company proposes to declare dividend out of the
accumulated profits earned by the company in previous years and transferred by
it to the reserves, such declaration of dividend shall not be made except in
accordance with such rules as may be made by the Central Government in this behalf,
and, where any such declaration is not in accordance with such rules such
declaration shall not be made except with the previous approval of the Central
Government.
(4) If the default is made in transferring the
total amount referred to in sub-section (1) or any part thereof to the unpaid
dividend account of the concerned company, the company shall pay, from the date
of such default, interest on so much of the amount as has not been transferred
to the said account, at the rate of twelve per cent per annum and the interest
accruing on such amount shall ensure to the benefit of the members of the
company in proportion to the amount remaining unpaid to them.
(5) Any money transferred to the unpaid
dividend account of a company in pursuance of this section which remains unpaid
or unclaimed for period of seven years from the date of such transfer shall be
transferred by the company to the Fund established under sub-section(1) of
Section 205C.
(6) The company shall, when making any
transfer under sub-section (5) to the Fund established under section 205C any
unpaid or unclaimed dividend, furnish to such officer as the Central Government
may appoint in this behalf a statement in the prescribed form setting forth in
respect of all sums included in such transfer, the nature of the sums, the
names and last known addresses of the persons entitled to receive the sum, the
amount to which each person is entitled and the nature of his claim thereto and
such other particulars as may be prescribed.
(7) The company shall be entitled to a receipt
from the authority or committee under sub-section(4) of section 205C for any
money transferred by it to the Fund and such a receipt shall be an effectual
discharge of the company in respect thereof.
(8) If a company fails to comply with any of
the requirements of this section, the company and every officer of the company
who is in default, shall be punishable with fine which may extend to five
thousand rupees for every day during which the failure continues.