Investor Education and Protection Fund (IEPF)
IEPF stands for Investor Education and Protection Fund. IEPF is a government entity set up under the Ministry of Corporate Affairs.
For Administration of the IEPF Government of India on the 7th September 2016 established as Investor Education and Protection Fund Authority under the provisions of section 125 of the Companies Act, 2013.
The Authority is entrusted with the responsibility of administration of the Investor Education Protection Fund (IEPF), make refunds of shares, unclaimed dividends, matured deposits/debentures, etc. to investors, and promoting awareness among investors.
The IEPF is to be utilized for
- The refund in respect of unclaimed dividends, matured deposits, matured debentures, the application money due for refund, and interest thereon
- Promotion of investors’ education, awareness, and protection
- Distribution of any disgorged amount among eligible and identifiable applicants for shares or debentures, shareholders, debenture-holders, or depositors who have suffered losses due to wrong actions by any person, in accordance with the orders made by the Court which had ordered disgorgement
- Reimbursement of legal expenses incurred in pursuing class-action suits under sections 37 and 245 by members, debenture-holders, or depositors as may be sanctioned by the Tribunal and
- any other purpose incidental thereto, in accordance with such rules as may be prescribed: Provided that the person whose amounts referred to in clauses (a) to (d) of sub-section (2) of section 205C transferred to Investor Education and Protection Fund, after the expiry of the period of seven years as per provisions of the Companies Act, 1956, shall be entitled to get a refund out of the Fund in respect of such claims in accordance with rules made under this section.
Meaning & Concepts
The dividend which is not paid or claimed within 30 days from its date of declaration
Unpaid Dividend Account
The dividend which is not paid or claimed within 30 days from its date of declaration, then the company within 7 days shall transfer such amount to a special account namely “Unpaid Dividend Account” which will be opened by Company in a scheduled bank.
As per the provisions in the rules, any amount transferred to the Unpaid Dividend Account of the company pursuant to Section 124(1) of the Companies Act. 2013, which is unpaid or unclaimed for more than 7 years from the date of declaration dividend shall be transferred along with interest accrued, if any, to the Investor Education and Protection Fund (IEPF).
The company shall submit the statement stating the details of such transfer in the prescribed format to the IEPF Authority and the authority shall issue a receipt as proof of the transfer.
In case of shares for which the dividend is not paid or claimed for more than 7 years continuously shall be transferred to the IEPF by the company attaching with it the statement providing details about the transfer
Procedure for Claiming Shares/Dividend from IEPF
Any person, whose unclaimed or unpaid amount has been transferred by the company to IEPF may claim their refunds to the IEPF Authority. For claiming such an amount, the claimant needs to file form IEPF-5 along with requisite documents.
- Download the form IEPF-5 from the website of IEPF (http://www.iepf.gov.in) for filing the claim for a refund. Read the instructions provided on the website/instruction kit along with the e-form carefully before filling the form
- After filling the form save it on your computer and submit the duly filled form by following the instructions given in the upload link on the website. On successful uploading, an acknowledgment will be generated indicating the SRN. Please note the SRN for future tracking of the form.
- Take a printout of the duly filled IEPF-5 and the acknowledgment issued after uploading the form.
- Submit indemnity bond in an original, copy of acknowledgment and self-attested copy of e-form along with the other documents as mentioned in the Form IEPF-5 to the Nodal Officer (IEPF) of the company at its registered office in an envelope marked “Claim for a refund from IEPF Authority”.
- Claim forms completed in all aspects will be verified by the concerned company and on the basis of the company’s verification report, a refund will be released by the IEPF Authority in favor of the claimants’ Aadhaar linked bank account through electronic transfer.
Only one Form can be filed for one financial year against one Aadhaar Number and one Company. Users can enter more than one claim in a single form, failing which the form is liable to be rejected
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Important links :
- Search at IEPF for your unclaimed amount: http://www.iepf.gov.in/IEPFWebProject/SearchInvestorAction.do?method=gotoSearchInvestor
- Faqs: http://www.iepf.gov.in/IEPF/faq.html
The article was originally published at https://www.biainvest.com/claim-unpaid-dividends-shares-investor-education-protection-fund/ by the author.