CA Inter P2 · Chapter 7 · Question 9 of 9
Under section 126, where an instrument of transfer of shares has been delivered to the company but the transfer has not yet been registered, the company shall:
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Reveal answer & explanation
Correct answer: D) Transfer the dividend relating to those shares to the Unpaid Dividend Account, unless the registered holder authorises in writing payment to the transferee
Explanation
Section 126 provides that where a transfer instrument has been delivered but the transfer is not registered, the company shall transfer the dividend on those shares to the Unpaid Dividend Account under section 124. This applies unless the registered holder authorises the company in writing to pay it to the transferee. Rights and bonus shares on those shares are similarly kept in abeyance.
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