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Within what period from the date of declaration must a declared dividend be paid, or its warrant posted, to avoid the consequences under section 127 of the Companies Act, 2013?

Question and options

Within what period from the date of declaration must a declared dividend be paid, or its warrant posted, to avoid the consequences under section 127 of the Companies Act, 2013?

  1. 21 days

  2. 60 days

  3. 15 days

  4. 30 days

Answer and explanation

Correct answer: D - 30 days

Section 127 makes directors who are knowingly parties to the default punishable, and the company liable to interest, where a declared dividend is not paid or its warrant not posted within thirty days from the date of declaration, subject to listed exceptions. The same thirty-day period triggers the transfer of unpaid dividends under section 124(1).

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