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CS Executive · Company Law and Practice · Distribution of Profits

Veda Textiles Ltd declared a final dividend at its AGM on 10 September. Some shareholders had not been paid or had not claimed their dividend by 10 October (30 days from declaration). Within what time after the expiry of that 30-day period must the company transfer the unpaid amount to the Unpaid Dividend Account?

The company must transfer the unpaid or unclaimed dividend to the Unpaid Dividend Account within seven days after the thirty-day period from declaration expires. The five-day rule concerns deposit of declared dividend, and the ninety-day rule concerns the statement of beneficiaries.

  1. AWithin seven days from the expiry of the 30 daysCorrect
  2. BWithin thirty days from the expiry of the 30 days
  3. CWithin ninety days from the expiry of the 30 days
  4. DWithin five days from the date of declaration

Explanation

Where dividend is not paid or claimed within thirty days of declaration, the company must transfer the unpaid total to the Unpaid Dividend Account in a scheduled bank within seven days from expiry of that thirty-day period. The five-day period relates to depositing the declared dividend in a separate bank account, and the ninety-day period relates to preparing the statement of unpaid dividend.

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