According to section 205(A), where a company has declared a dividend but not paid or is not claimed within 30 days then the company shall transfer the total amount so unpaid or unclaimed to a special account called unpaid dividend A/c. to be opened by the company in that behalf, within 7 days from the date of expiry of said 30 days.
Section 205(a)(5) further provides that money transferred to the unpaid dividend account if remains unclaimed for a period of 7 years from the date of such transfer, must be transferred to Investor Education and Protection Fund.
If the above provision is not complied with the company and every officer responsible shall be punishable with a fine which may extend to Rs. 5,000/- for every day during which the failure continues.
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