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If a company has not paid declared dividend within 30 days, the directors knowingly party to default are punishable with:
AImprisonment up to 2 years and fine of Rs 1000 per day during default
BOnly a fine of Rs 10 lakh
COnly a warning by the ROC
DDisqualification under Section 164 automatically
Answer & Solution
Correct answer: A. Imprisonment up to 2 years and fine of Rs 1000 per day during default
1. Section 127 — directors knowingly party to the default are liable to imprisonment up to 2 years and fine of Rs 1000/day during default.
2. Company is liable to interest at 18% p.a. on the unpaid amount.
3. Hence (A).
_Source: ICAI BoS CA Inter Paper 2 — Declaration and Payment of Dividend_