Whenever a Company declares the dividend, it becomes obligatory for the Company to pay the dividend within 30 days of its declaration. If there is any amount, which remains unpaid/unclaimed after expiry of 30 days, then Company will transfer that amount in a scheduled bank account opened by the Company under the name of “Unpaid dividend account”.
The unpaid/unclaimed amount will remain in the “unpaid bank account” of the Company till seven years thus any member can claim the dividend from that bank account by making an application to the Company up to 7 years from the date of transfer of amount. After expiry of seven years, the Company will transfer the amount lying in the bank account to the Investor Education and Protection Fund (IEPF).
If the member has not claimed its dividend from the Company up to 7 years then member has to the approach the IEPF authority to get their dividend back.
Furthermore as per section 124(6) of Companies Act, 2013 if any member of the Company has not claimed dividend on the share held by him for a continuous period of seven years then those shares will also be transferred by the Company to the IEPF and member has to make an application to IEPF authority to claim for shares along with the dividends declared thereon.
Further, any person whose matured deposits, matured debentures, share application money due for refund, or interest thereon, sale proceeds of fractional shares, redemption proceeds of preference shares etc., has been transferred to the Fund, may claim the same from the fund after following the due procedure mentioned below:
Procedure to claim refund from IEPF Authority
Rule 7 of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 states the process for refund to claimant, which is summarised as below:
- Claimant will file an online application with the IEPF Authority in the IEPF-5, a web based form, available on the website of IEPF i.e. iepf.gov.in. Claimant is not required to pay any fees to the IEPF authority for submission Form IEPF-5. However, authority may specify any fee time to time in consultation with the Central Government.
- After submission of the online form, it shall be transmitted online to the Nodal Officer of the Company for verification of the claim
(Nodal Officer is a person, nominated by the Company, who shall either be a Director or Chief financial Officer or Company Secretary of the Company, for the purposes of verification of claims and coordination with Investor Education and Protection Fund Authority)
- Claimant will submit the physical copy of the Form filed along with all the documents filed with Form IEPF 5 to the nodal officer of the Company at its registered office for verification of claim.
- After receipt of the documents, Company will verify the claim and within thirty days and submit an online report in e-verification form with the IEPF Authority.
- E-verification report will be filed along with the scanned copy of all the documents received from the claimant, duly certified by the nodal officer.
- Company will file e-verification report and submit whether it has accepted or rejected the claim of the claimant.
- IEPF authority will dispose off the application within sixty days from the date of receipt of the verification report from the company.
However, if authority didn’t dispose off the application within sixty days then it shall communicate the reason for delay to the claimant.
- Authority has also right to ask for further information/documents, if the authority finds it necessary to call for further information.
Information from Company: Intimation will be send to the Company for further information and Company will submit the details within 30 days from the intimation.
Information from Claimant: Intimation will be send to the claimant for further information/documents through email address as mentioned by the claimant in the form IEPF-5. Authority can grant a resubmission period of 15 days to the claimant to complete the defect in the form. Claimant will resubmit the form with IEPF Authority and send the revised/required document to the nodal officer of the Company, and Company shall file revised e verification report.
In case claimant didn’t resolve the queries of the Authority or fails to resubmit the form, Authority may reject the claim filed through Form IEPF-5.
- After acceptance of claim by the Company and the Authority, the Claimant will get the refund from the Authority through e payment and shares will be transferred to the demat account of the shareholder.