SEBI Grade A 2020

Company Law
Important MCQs - Chapter VIII
Declaration & Payment of Dividend

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 Question 1
The dividend that is paid by the company between two consecutive annual general meeting or at any time during the
period from closure of financial year till holding of AGM is called………………..

a) Annual Dividend
b) Final Dividend
c) Interim Dividend
d) None of the above

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 Dividend is a distribution of profits by a company to its shareholders.

Interim Dividend

ANNUAL ANNUAL
GENERAL GENERAL
MEETING MEETING

Final Final
Dividend Dividend

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 Question 1
The dividend that is paid by the company between two consecutive annual general meeting or at any time during the
period from closure of financial year till holding of AGM is called………………..

a) Annual Dividend
b) Final Dividend
c) Interim Dividend
d) None of the above

Answer- C

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 Question 2
If the company has incurred losses during the current financial year up to the end of the quarter immediately preceding
the date of declaration of interim dividend, then the rate of interim dividend shall not be more than average rate of
dividend of immediately preceding……………years.

a) 2
b) 3
c) 4
d) 5

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 SECTION 123 OF THE COMPANIES ACT, 2013

In case the company has incurred

losses during the current financial year Such interim dividend shall be maximum
up to the end of the the average dividends declared by the
quarter immediately preceding the company during the immediately
date of declaration of interim dividend preceding three financial years.

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 Question 2
If the company has incurred losses during the current financial year up to the end of the quarter immediately preceding
the date of declaration of interim dividend, then the rate of interim dividend shall not be more than average rate of
dividend of immediately preceding……………years.

a) 2
b) 3
c) 4
d) 5

Answer- B

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 Question 3
Any dividend, whether final or interim, shall be deposited in a scheduled bank in a separate account within…………days of
date of declaration of dividend.

a) 5
b) 10
c) 15
d) 20

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 If amount not transferred
within 7 days to unpaid
dividend account, Interest
@ 12% p.a. shall be levied.

Within 90 days of
Within 5 days of Within 30 days of Within 7 days from the transfer to unpaid
declaration declaration expiry of 30th day. Dividend account

Declaration of Deposit in a Dividend not Transfer Prepare

Dividend scheduled bank paid amount to statement and
in a separate Unpaid place on the
account Dividend website of
account company

If Dividend not paid/ warrant

not posted by company
Pay Dividend to within 30 days of declaration,
shareholders interest @ 18 % per annum
shall be levied.

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 Question 3
Any dividend, whether final or interim, shall be deposited in a scheduled bank in a separate account within…………days of
date of declaration of dividend.

a) 5
b) 10
c) 15
d) 20

Answer- A

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 Question 4
Which of the following is the correct mode for paying dividend?

a) Cash
b) Cheque or Warrant
c) Electronic mode
d) All of the above

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Section 123 of The Companies Act

The dividend shall be paid by a company in respect of any share therein only to the registered shareholder
of such share and shall be payable in cash.

Provided further that any dividend payable in cash may be paid by cheque or warrant or in any electronic
mode to the shareholder entitled to the payment of the dividend.

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 Question 4
Which of the following is the correct mode for paying dividend?

a) Cash
b) Cheque or Warrant
c) Electronic mode
d) All of the above

Answer- D

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 Question 5
X Ltd. is a company. It has declared dividend to its shareholders but nobody came to claim the dividend
within………….days. The company shall within ……………… days of the expiry of the aforesaid period shall transfer the
money to Unpaid Dividend account.

a) 30,7
b) 30,15
c) 15,7
d) 30,10

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 If amount not transferred
within 7 days to unpaid
dividend account, Interest
@ 12% shall be levied.

Within 90 days of
Within 5 days of Within 30 days of Within 7 days from the transfer to unpaid
declaration declaration expiry of 30th day. Dividend account

Declaration of Deposit in a Dividend not Transfer Prepare

Dividend scheduled bank paid/ not amount to statement and
in a separate claimed Unpaid place on the
account Dividend website of
account company

If Dividend not paid/ warrant

not posted by company
Pay Dividend to within 30 days of declaration,
shareholders interest @ 18 % per annum
shall be levied.

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 Question 5
X Ltd. is a company. It has declared dividend to its shareholders but nobody came to claim the dividend
within………….days. The company shall within ……………… days of the expiry of the aforesaid period shall transfer the
money to Unpaid Dividend account.

a) 30,7
b) 30,15
c) 15,7
d) 30,10

Answer-A

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 Question 6
If any default is made in transferring the amount to unpaid dividend A/c within the time specified, the company shall pay
interest at the rate of …………….. Percent per annum from the date of such default.

a) 10
b) 12
c) 15
d) 18

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 If amount not transferred
within 7 days to unpaid
dividend account, Interest
@ 12% shall be levied.

Within 90 days of
Within 5 days of Within 30 days of Within 7 days from the transfer to unpaid
declaration declaration expiry of 30th day. Dividend account

Declaration of Deposit in a Dividend not Transfer Prepare

Dividend scheduled bank paid/ not amount to statement and
in a separate claimed Unpaid place on the
account Dividend website of
account company

If Dividend not paid/ warrant

not posted by company
Pay Dividend to within 30 days of declaration,
shareholders interest @ 18 % per annum
shall be levied.

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 Question 6
If any default is made in transferring the amount to unpaid dividend A/c within the time specified, the company shall pay
interest at the rate of …………….. Percent per annum from the date of such default.

a) 10
b) 12
c) 15
d) 18

Answer- B

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 Question 7
The amount transferred to Unpaid Dividend Account if remains unclaimed for ……………. Years shall be transferred to the
Investor Education and Protection Fund.

a) 5
b) 6
c) 7
d) 8

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 Amount remains in
Unpaid Dividend
account for 7 years
Transfer amount and
interest thereon to
Investor Education &
Protection Fund

Company
Fails to transfer money to
 Fine – 5 Lakh to 25 Lakh
Unpaid Dividend account/
Officer in default
IEPF within the time specified
 Fine – 1 Lakh to 5 lakh
rupees

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 Question 7
The amount transferred to Unpaid Dividend Account if remains unclaimed for ……………. Years shall be transferred to the
Investor Education and Protection Fund.

a) 5
b) 6
c) 7
d) 8

Answer- C

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 Question 8
If the company fails to transfer the money in Unpaid Dividend account or Investor Education & Protection Fund as per the
time limits specified in the section, the company shall be punishable with maximum fine of Rs……………

a) 5 Lakh
b) 10 Lakh
c) 25 Lakh
d) 50 Lakh

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 Amount remains in
Unpaid Dividend
account for 7 years
Transfer amount and
interest thereon to
Investor Education &
Protection Fund

Company
Fails to transfer money to
 Fine – 5 Lakh to 25 Lakh
Unpaid Dividend account/
Officer in default
IEPF within the time specified
 Fine – 1 Lakh to 5 lakh
rupees

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 Question 8
If the company fails to transfer the money in Unpaid Dividend account or Investor Education & Protection Fund as per the
time limits specified in the section, the company shall be punishable with maximum fine of Rs……………

a) 5 Lakh
b) 10 Lakh
c) 25 Lakh
d) 50 Lakh

Answer- C

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 Question 9
The Investor Education Fund shall consists of a chairperson and members, not exceeding….., and also a Chief Executive
Officer.

a) 5
b) 7
c) 9
d) 11

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 Constitution of fund
Fund established by Central  1 chairperson
Government.  Members not exceeding 7
 1 Chief Executive Officer

Fund to be audited by Comptroller

and Auditor General of India(CAG).

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 Question 9
The Investor Education Fund shall consists of a chairperson and members, not exceeding….., and also a Chief Executive
Officer.

a) 5
b) 7
c) 9
d) 11

Answer- B

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 Question 10
Where the dividend declared by a company has not been paid within 30 days of declaration, company shall be liable to
pay simple interest at the rate of …………. Percent per annum during the period of such default.

a) 10
b) 12
c) 15
d) 18

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 If amount not transferred
within 7 days to unpaid
dividend account, Interest
@ 12% shall be levied.

Within 90 days of
Within 5 days of Within 30 days of Within 7 days from the transfer to unpaid
declaration declaration expiry of 30th day. Dividend account

Declaration of Deposit in a Dividend not Transfer Prepare

Dividend scheduled bank paid/ not amount to statement and
in a separate claimed Unpaid place on the
account Dividend website of
account company

If Dividend not paid/ warrant

not posted by company
Pay Dividend to within 30 days of declaration,
shareholders interest @ 18 % per annum
shall be levied.

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 Question 10
Where the dividend declared by a company has not been paid within 30 days of declaration, company shall be liable to
pay simple interest at the rate of …………. Percent per annum during the period of such default.

a) 10
b) 12
c) 15
d) 18

Answer-D

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