Q.Study the following case/situation and express your opinion:
GOLD Co. Ltd. declares a dividend of ₹ 10/- per share for F.Y. 2019-20.
Is the company under default, if the dividend was not paid within 30 days of its declaration?
Is the company right in transferring the unpaid dividend to its Debenture Reserve Account?
Does the company have to transfer the amount of unpaid dividends to IEPF after 30 days?

Non-payment within 30 days is a default; unpaid dividend goes to a special Unpaid Dividend Account, not a Debenture Reserve; and it is transferred to the IEPF only after 7 years.

Is the company in default if the dividend was not paid within 30 days of declaration? Yes. Once a dividend is declared, the company must pay it to the entitled shareholders within 30 days. If it fails to do so, the company (and the officers responsible) are treated as being in default and can be penalised.

Was it right to transfer the unpaid dividend to its Debenture Reserve Account? No. Any dividend that remains unpaid or unclaimed must be transferred to a separate account called the 'Unpaid Dividend Account' within 7 days from the end of the 30-day period. It cannot be diverted to a Debenture Reserve Account or used for any other purpose.

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