TRANSFER OF UNCLAIMED DIVIDEND AND UNCLAIMED SHARES- PROCEDURE
Unclaimed or
Unpaid Dividend
The purpose of investing in shares is to get returns
thereon. When a company earns profits, the same will be distributed to the
shareholders by way of dividend. Section 123 of the Companies Act, 2013, deals
with Declaration of Dividends. The Board of Directors of the company recommend
dividend and the shareholders at the General Meeting approve the dividend. When
the dividend is not claimed by the shareholders, it shall be transferred to
Unpaid Dividend Account in accordance with Section 124 of the Companies Act,
2013.
Meaning of Unclaimed
Dividend;
The dividend that has
been declared by the company and has not been paid or claimed by the members is
named as unclaimed or unpaid dividend.
Applicable
Section of the Companies Act 2013 and the Investor Education and Protection
Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016
As per Section 124(5)
of the Companies Act, 2013; the unclaimed or unpaid dividend for a period more
than 7years has to be transferred to Investor Education and Protection Fund established
under the Section 125 of the Companies Act, 2013, by the Central Government.
The procedure for transferring the amount unpaid or unclaimed to the IEPF is
stated in the Investor Education and Protection Fund Authority (Accounting,
Audit, Transfer and Refund) Rules, 2016.
Forms to be Filed
The following forms
are prescribed by the Government relating to Unclaimed Dividend;
·
Form No. IEPF-1- Statement of amounts to be credited to IEPF
·
Form No. IEPF-2- Statement of unclaimed or unpaid amounts
·
Form No. IEPF-3- Statement of shares and unclaimed or unpaid
dividend not transferred to the IEPF
·
Form No. IEPF-4- Statement of shares to be transferred to
IEPF
·
Form No. IEPF-5- Application to the Authority(constituted
under Section 125(5) of the Companies Act, 2013) for claiming unpaid amounts
and shares from the IEPF
·
Form No. IEPF-6- Statement of unclaimed and unpaid amounts to
be transferred to IEPF
Amounts to be credited to the IEPF
As per Section 125
of the Companies Act, 2013, the following shall be credited to Investor
Education and Protection Fund;
a.
the
amount given by the Central Government by way of grants after due appropriation
made by Parliament by law in this behalf for being utilised for the purposes of
the Fund;
b.
donations
given to the Fund by the Central Government, State Governments, companies or
any other institution for the purposes of the Fund;
c.
the
amount in the Unpaid Dividend Account of companies transferred to the Fund
under sub-section (5) of section 124;
d.
the
amount in the general revenue account of the Central Government which had been
transferred to that account under sub-section (5) of section 205A of the
Companies Act, 1956, as it stood immediately before the commencement of the
Companies (Amendment) Act, 1999, and remaining unpaid or unclaimed on the
commencement of this Act;
e.
the
amount lying in the Investor Education and Protection Fund under section 205C
of the Companies Act, 1956;
f.
the
interest or other income received out of investments made from the Fund;
g.
the
amount received under sub-section (4) of section 38;
h.
the
application money received by companies for allotment of any securities and due
for refund;
i.
matured deposits
with companies other than banking companies which has remained unclaimed and
unpaid for a period of seven years from the date of it becoming due for payment;
j.
matured
debentures with companies which has remained unclaimed and unpaid for a period
of seven years from the date of it becoming due;
k.
interest
accrued on the amounts referred to in clauses (h) to (j);
l.
sale
proceeds of fractional shares arising out of issuance of bonus shares, merger
and amalgamation for seven or more years;
m.
redemption
amount of preference shares remaining unpaid or unclaimed for seven or more
years; and
n.
such other
amount as may be prescribed
Further, through
notification to the IEPF Rules, 2016, the following additional amounts shall be
credited in the Fund:
a.
All
shares in respect of which dividend has not been paid or claimed for 7
consecutive years or more.
b.
All
resultant benefits arising out of shares held by IEPF under section 124(6) like
dividend, bonus shares, etc.
c.
All
grants, fees and charges received by the Authority under these rules;
d.
All sums
received by the IEPF Authority from such other sources as may be decided upon
by the Central Government
e.
All
income earned by the IEPF Authority in any year;
f.
All
amounts payable as mentioned in Section 108(3) of the Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1970 and Section 10B of Banking
Companies (Acquisition and Transfer of Undertakings) Act, 1980; and
g.
All
other sums of money collected by the IEPF Authority as envisaged in the Act
h.
Due,
unpaid or unclaimed interest on matured deposits transferred to the Fund;
i.
Due,
unpaid or unclaimed interest on matured debentures transferred to the Fund;
Procedure for transfer of Dividend
·
According
to Section 123(4) of the Companies Act, 2013, the amount of dividend declared, out
of profits or out of money provided by the Government, shall be deposited in a
Schedule Bank Account within 5days of declaration.
·
If the
declared dividend remains unpaid or unclaimed in the dividend account for more
than 30days from the date of declaration, the said amount shall be transferred
to Unpaid Dividend Account within 7days from the expiry of 30days as per
Section 124 of the Companies Act, 2013.
·
As per
Section 124(5), any money remaining unclaimed in the Unpaid Dividend Account
for a period more than 7years from the date of transfer of dividend to the said
account along with the interest accrued (if any), be transferred to the
Investor Education and Protection Fund (IEPF) established by the Central
Government within a period of 30days of such shares becoming due.
·
According
to provision to rule 6(3)(a) of the Investor Education and Protection Fund
Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the company
shall issue notice to the shareholders concerned regarding transfer of shares
three months before the due date of the shares to be transferred to the fund
and also publish the notice in one leading English newspaper and a regional
language newspaper.
·
The
company shall also publish on their website the details of such shareholders
and shares due to be transferred.
Depositing/
Crediting to IEPF and Forms to be filed
·
The deposit
can be made online or offline for transfer of such amount from the Unpaid
Dividend Account to the IEPF.
·
In case
of Offline payment, three copies of challan are to be generated and the same
shall be submitted to the concerned authority (constituted under Section 125(5)
of the Companies Act, 2013).
·
Thereafter,
the company shall file Form No. IEPF-1 with the statements of amounts credited
to IEPF as per provision of rule 5(4) of the Investor Education and Protection
Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016.
·
The
company shall within a period of 90days after the AGM and every year thereafter
till the completion of 7 years identify the unclaimed dividend amount and the
statement of the unclaimed or unpaid dividend shall be filed in Form No. IEPF-2
as per provision of rule 5(8) of the IEPF Rules, 2016.
·
In case,
specific order of the Court or Tribunal or Statutory Authority restrains the
transfer of shares or dividend, the company shall not transfer the same to the
Fund. The company shall furnish to the authority Form No. IEPF-3 within 30days
from the end of financial year containing statement of shares and unclaimed or
unpaid dividend not transferred to the IEPF.
·
Within
30days from the end of financial year, the company shall furnish a statement to
the authority in Form No. IEPF-6 statement of unclaimed or unpaid dividend due
to be transferred to the Fund in the next financial year.
Manner for
Transfer of Shares to IEPF as per Rule 6 of Investor Education and Protection
Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016
·
Where
the shares are dealt with depository, the company shall inform the depository
who shall effect the transfer of shares. Under the Investor Education and
Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016,
the shares shall be credited to IEPF Suspense Account with one Depository
Participant as may be identified by the Authority.
·
In case
of shares held in physical form, after passing necessary Board/ Committee
resolution for transfer, application shall be made by the Company Secretary or
the person authorised by the Board on behalf of the concerned shareholders for
issue of duplicate certificates.
·
The
duplicate certificate issued on receipt of the application shall on the face of
it contain that the duplicate certificate is “Issued in lieu of share
certificate No. ___ for the purpose of transfer to IEPF”.
·
Particulars
of such share certificate issued shall be entered in the register maintained in
Form SH-2.
·
After
the issue of duplicate certificates, the Company Secretary or the persona
authorised by the Board, shall sign the Form No. SH-4 for transferring the
shares in favour of the Fund.
·
The
company or depository shall preserve copies of the depository instruction
slips, transfer deeds and duplicate certificates for its record.
·
The
company shall inform the depository to convert the duplicate share certificates
issued into DEMAT form and transfer them to the authority concerned.
·
While
effecting the transfer, the company shall file the Form No. IEPF-4 containing
the statement of shares to be transferred to IEPF. The voting rights on shares
transferred to the Fund shall remain frozen until the rightful owner claims the
shares.
(The
above provisions excepting the provision for transfer of shares to IEPF are
applicable. The provision relating to transfer of shares is yet to be
notified).
Claiming the Unpaid amounts and
shares from IEPF as per Rule 7 of the Investor Education and Protection Fund
Authority (Accounting, Audit, Transfer and Refund) Rules, 2016
·
The
claimant, whose shares unclaimed dividend or interests thereon has been
transferred to IEPF, shall make an online application in Form No. IEPF-5. The
claimant shall file only one consolidated claim in respect of a company in a
financial year.
·
The
claimant shall send the form duly signed by him, with the other documents
necessary, to the concerned company at the registered office for verification
of the claim.
·
Documents
required are;
i.
Copy of
Acknowledgement
ii.
Indemnity
Bond with claimant signature
iii.
Advance
Stamped Receipt
iv.
Copy of
Aadhar Card
v.
Proof of
entitlement (certificate of shares, etc.)
vi.
In case
of refund of matured deposit or debentures, original certificate thereto
vii.
Cancelled
cheque leaf
viii.
Copy of
Passport, OCI and PIO card in case of foreigners and NRI
ix.
Other
optional document, (if any)
·
The
company shall send a verification report to the Authority within 15days from
the date of receipt of claim from the claimant.
·
Application
received for refund of any claim duly verified by the company shall be disposed
off by the Authority within 60days from the date of receipt of verification
report from the company. Any further delay beyond 60days shall be recorded in
writing specifying the reasons for delay and the same shall be communicated to
the claimant.
·
After
verification of the report, the authority shall take following actions;
i.
To the
amount claimed, the authority and then Drawing and Disbursement officer of the
Authority shall present a bill to the Pay and Accounts Office for e-payment.
ii.
In case
of shares claimed, the authority shall issue a refund sanction order with the
approval of competent Authority and shall credit the shares lying with the
Depository Participant in IEPF suspense account to the DEMAT account of the
claimant and in case of physical shares, cancel the duplicate certificate and
transfer the shares to the claimant.
In case of
Delisting or Winding up of the Company
·
If the
company is getting delisted, Authority shall surrender such shares with SEBI
and the proceeds realized shall be credited to the Fund.
·
In case
of company whose shares are held by the authority is being wound up, the Authority
may surrender the shares and credit the realised amount to the Fund. Any
further dividend declared shall be credited to the Fund and a separate ledger
account shall be maintained for such proceeds.
Format of Notice to be issued to
the Shareholders and in the newspaper
COMPANY
NAME AND REGISTERED OFFICE ADDRESS
CIN:
____
NOTICE
TO THE SHAREHOLDERS
TRANSFER OF UNPAID/ UNCLAIMED DIVIDEND FOR THE FINANCIAL YEAR 2009-10 TO
THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Notice is hereby given to the shareholders of the company pursuant to
Rule 6 of Investor Education and Protection Fund Authority (Accounting, Audit,
Transfer and Refund) Rules, 2016, as under;
In pursuance of the provisions of Section 125(1) of the Companies Act,
2013, the Central Government has established “Investor Education and Protection
Fund”. In terms of Section 124(5), every company has to credit the amount of
dividend which remains unpaid or unclaimed for a period of seven years from the
date of its transfers to Unclaimed Dividend Account, to the IEPF. Accordingly,
Dividend for the year 2009-10, which remains unclaimed for a period of 7 years,
will be credited to IEPF in the month of September, 2017.
Recently the Government of India vide. Notification dated September 05,
2016 came out with Rules constituting the Investor Education and Protection
Fund Authority to administer the said IEPF. In terms of the said Rules made
thereunder, all shares in respect of which the dividends are not claimed/ paid
for the last 7 years in respect of any shareholder have to be transferred to
IEPF Suspense Account with one Depository Participant to be identified by the
Investor Education and Protection Fund Authority.
To claim the dividend amount before its credit to IEPF, shareholders
may forward to us a written application to claim the unclaimed dividend at the
registered office of the company____, Chennai, on or before 30th
September, 2017. In case of no valid claim has been made, the shares in respect
of which the dividends are lying unclaimed/ unpaid will be transferred to IEPF
Suspense Account on completion of three months from the date of this notice,
individually served on the members along with the details of unclaimed
dividend.
The company has sent individual notices through registered post to the
latest available addresses of the shareholders whose dividends are lying
unclaimed since September, 2010 for the last 7 consecutive years, advising them
to claim the dividends expeditiously.
Further, in terms of Rule 6(3) of the Investor Education and Protection
Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the
statement containing the details of name, address, folio number, demat account
number and number of shares due to transfer is made available in our website www.websiteofthecompany.com for
information and necessary action by the shareholders.
In case the concerned shareholders wish to claim the shares after
transfer to IEPF, a separate application has to be made to the IEPF Authority
in Form IEPF-5, as may be prescribed under the Rules and the same is made
available at IEPF website i.e., www.iepf.gov.in.
For
___Company
Company
Secretary/ Director
Place: Chennai
Date: 01-09-2017
