Recovery of shares: The basic guides for you

Posted by Infiny Solution on April 19th, 2022

There are many people who invest their money into shares and do not remember to claim them, or many of them expired before the investors claimed them. In those cases, the money remains unclaimed for several years. Thus, the Ministry of Corporate Affairs, also known as MCA, introduced the IEPF or Investor Education and Protection Fund to make sure that those unclaimed shares can be transferred to the right person or the right person can receive them. Thus, the procedure of claim of shares from IEPE becomes really easy.

The shareholders of a company can receive a refund of their shares that are unclaimed. Those shares are transferred to the IEPF by a particular company according to the provisions of Section 124 of the Companies Act, 2013 and the Investor Education and Protection Fund Authority Rules, 2016.

Transfer of the shares that are unclaimed to IEPF

A company needs to transfer the shares where the dividend has not been paid or claimed for more than seven years to the department of IEPF along with the accumulated interest. The company needs to submit the details of the transfer procedure to the authority of IEPF.

A shareholder has the scope to reclaim his/her unclaimed shares that were transferred to IEPF by the organization just by applying to the IEPF authority.

Who is eligible for applying to IEPF authority for reclaiming shares?

Those shareholders whose unclaimed shares have been transferred to the authority of IEPF can claim a refund of those shares just by filing an application to the IEPF Authority. However, a claimant has the scope to make only a single consolidated claim related to the company in a financial year. This claim needs to include the data of different Folios from the same organization.

What is the process of an IEPF claim?

The entire procedure includes several crucial steps, such as:

1. Filing an application to the authority by the claimant

The claimant who wishes for a refund of shares needs to submit the form IEPF-5 on the portal of MCA. The claimant needs to provide the following information:

• The information of the claimant

• The information of the company like from when the amount is due, along with CIN number.

• Amount details of the dividend to be claimed.

• Details of the shares.

• Demat account number.

Aadhaar number of the claimant, if she/he is an Indian citizen or OCI/Passport/PIO card number if the claimant is a foreigner or NRI.

1. Submission of the claim to the company

Now, the claimant needs to send a copy of the form in an envelope labelled “Claim for a refund from IEPF Authority.” This needs to be sent to the Nodal Registrar/ Officer with the documents like:

• Copy of the acknowledgement, along with the SRN number.

• Printout of the filled Form IEPF-5, along with the signature of the claimant.

• Original advanced stamped receipt, along with the sign of the witness and claimant.

• Original indemnity bond, along with the sign of the claimant on a non-judicial stamp paper.

• Aadhaar card and original share certificates.

• Cancelled cheque and a copy of Demat account’s client master list.

1. Completion of the submission process

The company need to prepare a verification report and submit it to the IEPF authorities for a claim of shares from IEPF.

1. Refund from IEPF authority

The IEPF authority will issue a refund sanction order to fulfill the claim of the claimant.

In this way, you can complete the procedure of IEPF shares claim with ease.