Dividend Declaration & Compliance | Beyonte Compliances

Company Compliance · Dividends

Dividend Declaration & Compliance declare and pay dividends in accordance with Sections 123–127 of the Companies Act.

Dividends must be declared and paid in strict compliance with Sections 123 to 127 of the Companies Act, 2013. The process involves a board recommendation, shareholder approval (for final dividends), transfer of dividend amount to a separate bank account within five days, and payment to shareholders within 30 days. Failure to comply attracts penalties and, for unpaid dividends, transfer to the Investor Education and Protection Fund (IEPF).

At Beyonte Compliances, we manage the end-to-end dividend compliance process — from assessing distributable profits and advising on interim versus final dividends, to drafting resolutions, filing MGT-14, maintaining the dividend register, managing the unpaid dividend account, and ensuring IEPF compliance.

What Our Dividend Declaration Service Covers

Distributable Profit Assessment

Reviewing the company's financials to confirm the availability of distributable profits and compliance with free reserves requirements.

Interim vs. Final Dividend Advice

Advising on whether to declare an interim dividend (board approval only) or a final dividend (shareholder approval required).

Board Resolution

Drafting the board resolution recommending or declaring the dividend and fixing the record date.

AGM / EGM Resolution

Drafting the shareholder resolution for final dividend declaration at the AGM or EGM.

Dividend Bank Account

Ensuring transfer of the total dividend amount to a separate scheduled bank account within five days of declaration.

MGT-14 Filing

Filing Form MGT-14 with the ROC within 30 days of passing the board or shareholder resolution.

Unpaid Dividend Account

Managing transfer of unpaid dividends to the Unpaid Dividend Account after 30 days of the due payment date.

IEPF Compliance

Transferring unclaimed dividends and shares to the Investor Education and Protection Fund (IEPF) after seven years and filing Form IEPF-1.

Our Process

Financial Assessment

Reviewing distributable profits, free reserves, and prior-year losses to confirm the company can legally declare a dividend.

Board Resolution & Record Date

Passing board resolution for interim/final dividend, fixing the record date, and opening the dividend bank account.

AGM Shareholder Approval

Obtaining shareholder approval for final dividend at the AGM (or passing interim dividend by board resolution).

Payment within 30 Days

Ensuring dividend payment to all shareholders within 30 days of declaration.

Unpaid Dividend & IEPF

Transferring unpaid amounts to the Unpaid Dividend Account and to IEPF after seven years, with Form IEPF-1 filing.

Why It Matters

✓Distributable profits and free reserves assessed before declaration

✓Board and AGM resolutions drafted and obtained

✓Record date fixed and communicated to shareholders

✓Dividend amount transferred to separate bank account within five days

✓Form MGT-14 filed with ROC within 30 days

✓Dividend paid to shareholders within statutory 30-day window

✓Unpaid Dividend Account maintained and managed

✓IEPF transfers and Form IEPF-1 filing handled

Frequently Asked Questions

A company cannot declare a dividend from its current year losses. However, if it has accumulated profits (free reserves) from prior years, it may declare a dividend from those reserves, subject to the Companies (Declaration and Payment of Dividend) Rules, 2014.

Dividend must be paid within 30 days of its declaration. If unpaid within 30 days, the amount must be transferred to the Unpaid Dividend Account within seven days.

Unpaid or unclaimed dividends that remain in the Unpaid Dividend Account for seven years must be transferred to the Investor Education and Protection Fund (IEPF), along with the corresponding shares. The company must file Form IEPF-1 and IEPF-1A.

Yes. Form MGT-14 must be filed with the ROC within 30 days of passing the board or shareholder resolution approving the dividend — as dividend resolutions are resolutions required to be filed under Section 179(3).

Ready to declare a dividend? Let's ensure full compliance.

Contact our team — resolution to IEPF compliance, all managed.