Q.Explain the statutory procedure regarding an unclaimed dividend and its eventual transfer to the Investor Education and Protection Fund (IEPF).

The law gives an unclaimed dividend a clear escalating path — from a special company account to a national investor-protection fund — with a real chance for the member to claim it at every stage.

Section 123 of the Companies Act, 2013 requires a declared dividend to be paid to every entitled member within 30 days of declaration. Where, despite this, a member's dividend remains unpaid or unclaimed, Section 124 lays down a clear escalating procedure:

1. Transfer to the Unpaid Dividend Account — within 7 days of the expiry of the 30-day payment period, the company must transfer the unclaimed amount to a special bank account, the Unpaid Dividend Account, and within 90 days of that transfer, publish the names and last known addresses of the members concerned on its own website and the Ministry of Corporate Affairs website.
2. A member may still claim the amount from the Unpaid Dividend Account at any time during the following 7 years, simply by applying to the company.
3. Transfer to the IEPF — if the amount remains unclaimed for a further 7 consecutive years from the date of transfer to the Unpaid Dividend Account, Section 124(5) requires the company to transfer it, along with interest accrued, to the Investor Education and Protection Fund (IEPF) established under Section 125.
4. Transfer of the underlying shares — Section 124(6) goes further: the shares themselves, on which dividend has remained unclaimed for the same 7 consecutive years, must also be transferred to the IEPF's own demat account, not merely the dividend amount. …