Timeline for payment of dividend and transfer to UDA/IEPF (Section 124)

# Timeline for Payment of Dividend — Section 124

Treat this as a chain of deadlines. Each step has its own clock.

## Step-by-Step Timeline

```

Day 0 Day 5 Day 30 Day 37 Day 90 from UDA transfer

| | | | |

Declare Deposit in Pay dividend / Transfer to Place statement on

dividend separate post warrants Unpaid Dividend company website & MCA

scheduled bank to shareholders Account (UDA) website

account

```

### Step 1 — Deposit in Separate Bank Account (within 5 days of declaration)

The declared dividend is moved out of the general account into a separate scheduled-bank account. This ringfences the money.

### Step 2 — Pay Dividend / Post Warrants (within 30 days of declaration)

Money must reach shareholders, or warrants must be posted, within 30 days.

Note: Non-receipt of the warrant by the shareholder within the time does not attract punishment — what matters is that the company posted it.

### Step 3 — Transfer Unpaid/Unclaimed to UDA (within 7 days after the 30 days expire)

If any dividend is unpaid/unclaimed at the end of 30 days, it must be transferred to the Unpaid Dividend Account (UDA) — a separate account with a scheduled bank — within 7 more days.

Default in transferring to UDA → company shall pay interest @ 12% p.a. on the defaulted amount from the date of default, payable to the members entitled.

### Step 4 — Place Statement (within 90 days of transfer to UDA)

Company must prepare a statement with:

• Name of unpaid claimant,
• Last known address,
• Unpaid dividend amount,

and place it on the company's website and on the MCA-approved website.

### Step 5 — Transfer to IEPF (if unclaimed for 7 years from transfer to UDA)

If the money remains unpaid/unclaimed in UDA for 7 years, it is transferred to the Investor Education and Protection Fund (IEPF) along with interest. The company files a statement of transfer with the IEPF Authority, which issues a receipt as evidence.

## Shares Themselves Also Move to IEPF

If dividend is unpaid/unclaimed for 7 consecutive years, the underlying shares are also transferred to IEPF along with a prescribed statement.

Important carve-out: If dividend is paid/claimed for any year within those 7 years, the 7-year clock effectively resets — shares are not transferred.

## Reclaim Mechanism

• Person entitled to money in UDA may apply to the company to claim it.
• Person entitled to money/shares in IEPF may reclaim from the IEPF Authority through an online application as per prescribed procedure.

## Penalty for Non-Compliance with Section 124

## Memory Aid — "5 / 30 / 7 / 90 / 7"

• 5 days → deposit in separate bank account
• 30 days → pay / post warrants
• 7 days → transfer unpaid to UDA
• 90 days → publish statement on website
• 7 years → transfer UDA money & shares to IEPF