## 1. Transfer of Unpaid Dividend to UDA — Sec 124(1)
Where a dividend has been declared but not paid or claimed within 30 days of declaration,
The company shall, within 7 days from the expiry of the said 30 days,
Transfer the unpaid/unclaimed amount to a special account called the 'Unpaid Dividend Account' opened in a scheduled bank.
Timeline summary: 30 + 7 = 37 days from declaration.
## 2. Interest on Default in Transfer — Sec 124(3)
If the company fails to transfer the unpaid dividend to UDA within the specified time:
The company shall pay interest @ 12% per annum from the date of default,
Such interest accrues for the benefit of the members in proportion to the amount remaining unpaid.
## 3. Claiming Unpaid Dividend from UDA — Sec 124(4)
Any person claiming to be entitled to the money lying in UDA may apply to the company for payment.
## 4. Statement on Website — Sec 124(2)
Within 90 days of transferring the amount to UDA, the company must prepare a statement containing:
Names of the persons entitled,
Their last known addresses,
The amount of unpaid dividend to which each is entitled.
This statement shall be placed on:
The company's website, AND
Any other website approved by the Central Government for this purpose (typically the MCA's IEPF portal).
## Visual Timeline
```
Day 0 Day 30 Day 37 Day 127
| | | |
Decl. Last day to Last day to Last day to
pay transfer upload statement
to UDA on website
```
## Logic
UDA segregates funds belonging to non-claiming shareholders from the company's working capital, preventing the company from quietly using their money.
12% interest is a deterrent against companies sitting on unpaid dividend.
Website disclosure lets members search and reclaim their funds without depending on the company's notice.
## Key Takeaway
The rhythm of unpaid dividend is 30 → 7 → 90: 30 days to pay, 7 days to transfer to UDA, 90 days to publish details online.
Worked example
### Example 1
Example 1 (Timeline): XYZ Ltd. declares dividend on 1-Sep-2025. As of 30-Sep-2025 (Day 30), ₹5 lakh remains unpaid/unclaimed. By 7-Oct-2025 (Day 37), the company must transfer ₹5 lakh to its Unpaid Dividend Account. By 30-Dec-2025 (Day 127), it must upload the detailed statement on its website and the MCA-approved website.
### Example 2
Example 2 (Default interest): ABC Ltd. delays transfer of ₹10 lakh by 60 days beyond the 7-day window. Interest payable = 10,00,000 × 12% × 60/365 ≈ ₹19,726. The interest belongs to the affected members, not the company.
⚠️ Common exam mistakes
Stating the timeline as 30 + 30 days instead of 30 + 7 days for transfer to UDA.
Confusing the company's interest liability (12% on default in transfer) with the company's liability for the unpaid dividend itself (no interest is paid to shareholders on the unpaid dividend itself — only on the default in transfer).
Believing the statement of unpaid dividend goes only on the MCA portal — it must also be on the company's own website.
Mixing 90 days (statement upload) with 7 years (transfer to IEPF).
Bare-Act text Section 124(1) to 124(4) · Companies Act, 2013 · click to expand
Section 124(1): Where 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 to a special account to be opened by the company in that behalf in any scheduled bank to be called the Unpaid Dividend Account. (2) The company shall, within a period of ninety days of making any transfer of an amount under sub-section (1) to the Unpaid Dividend Account, prepare a statement containing the names, their last known addresses and the unpaid dividend to be paid to each person and place it on the website of the company, if any, and also on any other website approved by the Central Government for this purpose. (3) If any 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 company, it 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 enure to the benefit of the members of the company in proportion to the amount remaining unpaid to them.