The dividend declared at an Annual General Meeting is required to be paid within 30 days from the date of declaration of the said dividend. The companies are required to deposit the balance amount lying in the dividend account to an unclaimed dividend account within 37 days from the date of declaration. Any amount lying in the said account is termed as unclaimed dividend amount.
Dividends that are not encashed or claimed, within seven years from the date of their transfer to the unclaimed dividend account, will in terms of the provisions of Section 124 of the Companies Act, 2013, be transferred to the Investor Education and Protection Fund (IEPF) (Section 125 of Companies Act, 2013), established by the Government of India. In terms of the provisions of Section 125 of the Companies Act, 1956, no claim shall lie against the Company or the said Fund after the said transfer.