Knowing About IEPF And Transfer Shares To IEPF



Having shares in the form of dividends, deposits etc of any company is quite a handful task. Especially when they are unclaimed for at least 7 years. but like everything else in the world, even these unclaimed shares need to have someone authorizing them and that is why the government has brought about IEPF under Section 125 of the Companies Act 2013.

According to IEPF or Investor Education and Protection Fund, the government takes care of all the unclaimed shares and dividends by transferring them. It is either automatically transferred or a process is followed to transfer shares to IEPF. Let’s look into the details of this act and the process involved.

Transferrable Materials Are

Every investment that has been left ideal for 7 years or longer consecutively is transferred to the IEPF Authority. But they are not just transferred as investments, but with specific titles. It is important to know these before looking into the transfer process.

  • Dividends: these are directly issued by a company that is unclaimed by any investor or higher-ups of the company itself.
  • Shares: when the investment is left for 7 consecutive years, then they are transferred to IEPF as shares.
  • Matured deposits and debentures: One is for non-banking companies whereas debentures are the ones that are left unclaimed with the company.

Though there are a few more kinds, these are the main ones that we will focus on transferring to IEPF and under their safe care.

Transfer Process Goes Like…

Transfer of shares to IEPF is automatic when it comes to the shares that are left unclaimed by companies and investors for 7 consecutive years. There is a way to recover them as well, but this is not the main focus here. But apart from the automatic transfer, a company itself is allowed to transfer shares to IEPF and this is called transmission.

There is a shareholding for every share that is to be transferred to IEPF and it is very important to have a record of every shareholder and the one who will get the shares on maturity period from the IEPF account. These shares are held off until the shareholder is decided.

To transfer the shares, these shares have to be transferred to the DEMAT Account of the IEPF Authority within 30 days of them having to be shared with the IEPF itself. The procedure for transmission of these shares has to be followed carefully. The board of directors of the company shall sign the necessary documents for the transfer of shares and the company has to update all the right information about the shareholders present for the shares.

A Difficult Process…

It might seem like a difficult process because there are a lot more procedures left to follow. But it will be easier with your legal adviser at your side and the right agency that can help you with the details. If the shares are going to be transferred physically, then the form has to be collected from the office and filled with the necessary. There are application forms available online that cost a little but are a good start.

One of the most important things to know is why the shares are being transferred to IEPF. There are many reasons and it could be due to not claiming dividend warrants and no track of old and physical investments. Until the time these required papers are produced, the shares cannot be taken back from IEPF.

So, it is like a safety locker for the shares that will become burdensome for you until you can produce the right evidence for them. This act was made to ensure that there is no misuse of unclaimed land, even if it is due to shared names of family members, marriage, divorce or voluntary.

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