Unclaimed Dividends
Unclaimed dividend is the declared dividend by a company which is not encashed or claimed by the shareholders
What We Do
UNCLAIMED DIVIDENDS
An unclaimed dividend refers to the dividend declared by a company that has not been claimed or encashed by the shareholder. According to the Companies Act, 1956, if a dividend remains unpaid or unclaimed for 30 days after it is declared, the company must transfer the amount to a separate bank account called the Unpaid Dividend Account.
Shareholders can claim their dividends from this account within the next seven years. If the dividend remains unclaimed for this entire period, it is transferred to the Investor Education and Protection Fund (IEPF), which is administered by the Ministry of Corporate Affairs.
How We Can Help You
Unclaimed dividends are amounts declared by a company but not received by the shareholder. This often occurs when shareholders change their address, relocate, or fail to update their contact details with the company, resulting in missed dividend payments.
In a companyās financial statements, unclaimed dividends are recorded under current liabilities and provisions, as shareholders are entitled to claim them within the prescribed time period.
Investors may face issues in claiming their dividends due to several reasons, including the following:
Outdated Records
Unclaimed dividends often arise due to incorrect or outdated shareholder information in the companyās records. Failure to update changes such as address, bank details, or contact information can lead to mismatches in the investorās records and prevent dividend payments from reaching the shareholder.
Non-Execution of Transfer
In some cases, shares purchased by an investor remain in the name of the seller because the transfer process was not completed. This situation is more common when shares are held in physical form, which can result in the buyer not receiving dividends or other benefits.
Non-Execution of Transmission
This occurs when legal heirs or successors do not complete the transmission of shares after the death of the original investor. As a result, the shares remain in the deceased shareholderās name in the companyās records, leading to unclaimed benefits such as dividends or other corporate entitlements.
