The Ultimate Guide to IEPF and Shares Recovery

Posted by Infiny Solution on March 20th, 2023

In the past, share investments were made using genuine paper share certificates. In exchange for their investments in a corporation, the investors received shares or debentures as tangible gifts. Because they were in paper form, these shares or debentures were difficult to retain and easily lost or destroyed.

Now, the Company shall transfer all Shares in the name of the Investor Education and Protection Fund, including Shares with regard to which a dividend has not been paid or claimed for a period of seven or more years in a row.

IEPF Recovery

IEPF: What is it?

The IEPF, or the Investor Education and Protection Fund, was formed by the Central Government of India (GoI) to safeguard investors’ interests and raise public awareness. According to Section 125 of the 2013 Companies Act, the IEPF was created. Investors’ underpaid or unclaimed payments to a corporation are gathered and added to the IEPF.

The IEPF Authority, which is comprised of a chairperson or CEO and up to seven other members who are all selected by the Indian central government, is responsible for managing the IEPF.

The IEPF Authority will only use and spend IEPF monies in ways that are permitted by the Act. The financial records of the IEPF will be audited by India’s Comptroller and Auditor-General. The audit report and the accounts will be delivered by the Authority to the Indian Central Government on a yearly basis.

Who has the right to ask the IEPF authorities for share recovery?

By submitting a straightforward application to the IEPF Authorities, every the IEPF may request a return of shares. However, each Financial Year, a claimant is only allowed to make one combined claim in regard to a firm. The aggregated claim should incorporate the data from various Folios from the same business.

Restoration of Shares

Unclaimed shares, sometimes referred to as IEPF recovery, are those that have been transferred to IEPF and may only be reclaimed after following the correct method outlined by MCA and IEPF. The experts will provide end-to-end assistance from the application submission to receiving a return from the IEPF.

To recover shares from the IEPF, the following papers are required:

  • The papers listed below must be submitted by the claimant in order to ask for the recovery of shares:

Specifics regarding the Claimant’s Information about the business from which the claim is filed Details regarding the recovery of shared information Particulars of the required dividend payment.

  • The applicant’s citizenship, Aadhar Card, passport, PIO card number, OCI and other private data

Information on the bank account associated with the Aadhar card DEMAT number. Printout of the fully filled form with the claimant’s signature and a copy of the acknowledgment with the SRN number are the two documents the claimant must submit to receive a reimbursement.

An indemnification bond with the claimant’s sign on non-judicial stamp paper, for the amount specified in the Stamp Act. The original advanced stamp receipt, signed by the witness and the claimant, Original share certificate, and Aadhar card information serving as proof of entitlement NRIs and foreign nationals: Identities and other documents canceled check DEMAT account list copy

How can shares be recovered from the IEPF?

The recovery of shares from IEPF is made using the following method:

  • Step 1: Uploading Documents to the Portal:

The claimant or client who wants to file for the recovery of shares must provide with the necessary form and supporting proof.

  • Step 2: Making the Refund Claim Submission:

The claimant must deliver a copy of the form in an envelope labeled “Refund Claim from IEPF Authority” to the company’s registrar or the IEPF Nodal Officer after completing the necessary paperwork and accompanying evidence.

  • Step 3: Filing of Claim to IEPF Authorities:

The Corporation is expected to create a verification report within 15 days after submitting the supporting documentation to the Company’s IEPF Nodal officer. The verification report and the paperwork required to move forward with the recovery of shares must then be provided to the IEPF authorities.

  • Step 4: Refunding:

The IEPF authority will decide whether to compensate the claimant sixty days after the report is submitted. The IEPF authority reimburses for the shares that were recovered when the claimant is entitled to them after requesting and receiving approval from the appropriate Authority. The IEPF officer sends the claimant a bill for payment, and the money is credited to their DEMAT account.

If the Company rejects the prospective Shareholder’s application for the Transfer of Shares, the Shareholder may approach National Company Law Tribunal to request an order for the ToS or the Transfer of Shares by the Company.

The Investor Education & Protection Fund, or IEPF, was established by the Ministry of Corporate Affairs to address these difficulties and to make sure that the unclaimed shares of the IEPF may be transferred to and received by the appropriate person.

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Infiny Solution
Joined: May 18th, 2021
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