Introduction
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 Central Government has mandated for transfer of amount of “Unpaid Dividend Account” lying unpaid/unclaimed for 7 years, by the Company in a Fund known as Investor Education and Protection Fund (IEPF).
Company is also required to transfer all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more in the name of Investor Education and Protection Fund.
Procedure
Rule 7 of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 states the process for refund to claimant which includes:
● Filing an online application with the IEPF Authority in the IEPF-5, a web based form, available on the website of IEPF i.e. www.iepf.gov.in.
● Submission of original documents with copy of form filed to the Company
● 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
● Company will file e-verification report with IEPF authority 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.
● 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
Documents to be submitted by Claimant with Form IEPF-5
- Copy of Aadhar Card of the claimant and if joint holders are there, copy of Aadhar card of all joint holders.
- Copy of Passport, OCI and PIO card in case of foreigners and NRI.
- Copy of PAN card.
- Client Master List of De-mat account of the claimant.
- Proof of entitlement (Bonds/Debentures/Fixed Deposit receipts/Certificate of share/Interest warrant/ Dividend warrant, Application No./Statement of transaction etc.
- Indemnity Bond.
- Advance Receipt.
- Cancelled cheque leaf.
- Signature Verification from Bank.
FAQ’s
What is the timeframe for a company to submit a verification report and claimant's documentation to the IEPF Authority upon receiving a claim form from a claimant?
Companies are required to submit the verification report and claimant's documentation to the IEPF Authority within 15 days of receiving a claim form from a claimant.
What is the process for claiming a refund of unclaimed shares from the IEPF Authority?
Shareholders can claim a refund of unclaimed shares from the IEPF Authority by submitting a consolidated claim for a specific company, provided they have received an entitlement letter from the company and adhere to the annual claim restrictions.
How can shareholders recover unclaimed shares transferred to the IEPF, and what triggers this transfer?
Companies transfer shares to the Investor Education and Protection Fund (IEPF) after seven years of unclaimed dividends. Shareholders can reclaim their shares by applying to the IEPF Authority, which keeps track of all transfers.
The Investor Education and Protection Fund (IEPF): What is it?
The Indian government established the IEPF as a fund to safeguard investors' interests and advance investor education. Additionally, it acts as a storage facility for shares and other securities that were transferred to it as a result of dividends and other advantages not being claimed or received.
How can I find out if the IEPF has my shares?
By going to the IEPF website or getting in touch with the company's registrar and transfer agent, you can find out the current status of your shares.
For what reason are shares moved to the IEPF?
When shareholder do not receive dividends or other benefits for a predetermined amount of time, their shares are transferred to the IEPF. To protect investors' interests, this is being done.
In what way may I get my shares back from the IEPF?
You must submit an application in Form IEPF-5, which is available on the IEPF website, along with the necessary paperwork in order to retrieve shares from the IEPF.
What paperwork is required in order to claim shares from the IEPF?
Documents like ownership verification, share certificates, and other papers included in Form IEPF-5 are usually required to be submitted.
Where do I file my application to get my shares back from the IEPF?
The appropriate IEPF Authority, which is typically the Ministry of Corporate Affairs (MCA) or a government agency designated by the MCA, is where you should submit your application.
Are the dividends and interest that I have earned on my IEPF shares likewise refundable?
It's true that you are entitled to all dividends, interest, and other advantages that your shares accrued during their time in the IEPF.