UNPAID/ UNCLAIMED DIVIDEND
The word “Dividend” has
origin from the Latin word “Dividendum”. It means a thing to be
divided. Dividend means the portion of the profit received by the shareholders
from the company's net profit, which is legally available for distribution
among the members. Therefore, dividend is a return on the share capital
subscribed for and paid to its shareholders by a company. Dividend defined
under section 2(35) of the Companies Act, 2013, includes any interim dividend.
UNPAID DIVIDEND ACCOUNT:
Provisions of Unpaid Dividend
Account:
§
Once
dividend transferred in Dividend Account but not has not been claimed by the
shareholder within 30 days of declaration of dividend.
§
The
Company shall transfer such unpaid amount within 37 days from the date of
declaration in a special account ‘Unpaid Dividend Account’.
§
The
company shall, within a period of ninety days of making any transfer of an amount
under sub-section (1) to the Unpaid Dividend Account,
-
prepare
a statement containing the names, their last known addresses and the unpaid
dividend to be paid to each person
-
and
place it on the website of the company, if any, and
-
also
on any other website approved by the Central Government for this purpose, in
such form, manner and other particulars as may be prescribed.
Whether entitled
shareholder can claim amount from the unpaid dividend account.
Any person claiming to
be entitled to any money transferred under sub-section (1) to the Unpaid
Dividend Account of the company may apply to the company for payment of the
money claimed.
Penalty:
If any default is made
in transferring the total amount referred to in sub-section (1) or any part thereof
to the Unpaid Dividend Account of the company, it shall pay, from the date of
such default, interest on so much of the amount as has not been transferred to the
said account, at the rate of twelve per cent. per annum and the interest
accruing on such amount shall enure to the benefit of the members of the
company in proportion to the amount remaining unpaid to them.
Investor Education and Protection Fund
Provisions of Investor Education and
Protection fund:
Transfer of Dividend: Any money transferred to
the Unpaid Dividend Account of a company in pursuance of this section which
remains unpaid or unclaimed for a period of seven years (7 year and 37 days
from the date of declaration of dividend) from the date of such transfer shall
be transferred by the company along with interest accrued, if any, thereon to Investor
education and protection fund.
§
The
company shall send a statement in the prescribed form of the details of such
transfer to the authority which administers the said Fund and that authority
shall issue a receipt to the company as evidence of such transfer.
Transfer of Shares:
All
shares in respect of which [dividend has not been paid or claimed for seven consecutive
years or more shall be] transferred by the company in the name of Investor Education
and Protection Fund along with a statement containing such details as may be prescribed:
Whether
Shareholder can claim transfer of shares/Dividend from Investor Education and
Protection Fund.
Yes,
any claimant of shares transferred above shall be entitled to claim the
transfer of shares from Investor Education and Protection Fund in accordance
with such procedure and on submission of such documents as discussed below.
Process of transfer of dividend to
Investor Education and Protection fund:
As
per MCA Investor Education and Protection Fund
Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 dated 05th
September, 2016:
1.
The
Company shall credit the fund due for transfer in investor Education and
protection Fund within 30 days of becomes due.
2.
The
amount shall be tendered by the companies along with challan (in triplicate) to
the specified Bank Branches who will return two copies of the challan, duly
stamped in token of having received the amount, to the Company.
3.
Every
company shall file with the concerned Authority one copy of the challan
indicating deposit of the amount to the Fund and shall fill in the full
particulars of the amount tendered, including the head of account to which it
has been credited.
4.
The
company shall, along with the copy of the challan furnish a Statement in Form
No. IEPF 1 containing details of such transfer to the Authority within thirty
days of submission of challan.
5.
The
Company shall maintain record consisting of name, last known address, amount,
folio number or client ID, certificate number, beneficiary details etc. of the
person in respect f whom unpaid or unclaimed amount has remained unpaid or
unclaimed for a period of 7 years and has been transferred to the fund and the
authority shall have the power to inspect such records.
Yearly Compliance for
the Company:
IEPF-2
Every
company shall within a period of ninety days after the holding of
Annual General Meeting and every year thereafter till completion of the seven
years period, identify the unclaimed amounts, as referred in sub-section 2 of
section 125 of the Act, as on the date of holding of Annual General Meeting, separately
furnish and upload on its own website and also on website of Authority or any
other website as may be specified by the Government, a statement or information
through Form No. IEPF 2, separately for each year, containing
following information, namely:-
(a) The names
and last known addresses of the persons entitled to receive the sum;
(b) The nature
of amount;
(c) The amount
to which each person is entitled;
(d) The due
date for transfer into the Investor Education and Protection Fund; and
(e) Such other
information as may be considered relevant for the purposes.
IEPF-6
(1)
The company shall furnish a statement to the Authority in Form No. IEPF 6
within thirty days of end of financial year stating therein the amounts due to
be transferred to the Fund in next financial year.
(2)
The company shall also furnish a statement to the authority within thirty days
of the closure of its accounts for the financial year stating therein the
reasons of deviation, if any, of amounts detailed in sub-rule (1) above and
actual amounts transferred to the Fund.
Process of refund to claimant from
Investor Education and Protection fund:
Section125(3)
of Companies Act,2013 enabling investors to claim their unpaid dividends, matured
deposits or debentures etc. transferred to Investor Education and Protection Fund(IEPF) by companies has been
commenced with effect from 7TH September,2016. Claimants may file
their applications to the IEPF Authority, as per the procedure hereunder: The
claimant shall file only one consolidated claim in respect of a Company in a
financial year.
1 . Download the FormIEPF-5 from the website of IEPF
(http://www.iepf.gov.in) for filing the
claim for refund. Read the instructions provided on the website/instruction kit
along with the e-form carefully before filing the form.
2. After filing the form save it on your computer
and submit the duly filled form by following the instructions given in the
upload link on the website. On successful uploading an acknowledgement will be
generated indicating the SRN. Please note the SRN for future tracking of the
form.
3. Take a printout of the duly filled IEPF-5 and
the acknowledgement issued after uploading the form.
4. Submit indemnity bond in original, copy of
acknowledgement and self attested copy of e-form along with the other documents
as mentioned in the Form IEPF-5 to Nodal Officer (IEPF) of the company at its
registered office in an envelope marked “Claim for refund from IEPF Authority”.
5 . Claim forms completed in all aspects will be
verified by the concerned company and on the basis of company’s verification
report, refund will be released by the IEPF Authority in favor of claimants’
Aadhaar linked bank account through electronic transfer
Report from Company to
Authority:
The
Company shall, within 15 days of receipt of claim form, send a verification
report to the authority in the format specified by the authority along with all
the documents submitted by the claimant.
An
application received for refund of any claim under this rule duly verified by
the concerned company shall be disposed of by the Authority within 60 days from
the date of receipt of the verification report from the Company, complete in
all respects and any delay beyond 60 days shall be recorded in writing
specifying the reasons for the delay and the same shall be communicated to the
claimant in writing or by electronic means.
(Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES
Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com)
Disclaimer:
The
entire contents of this document have been prepared on the basis of relevant
provisions and as per the information existing at the time of the preparation.
Although care has been taken to ensure the accuracy, completeness and
reliability of the information provided, I assume no responsibility therefore. Users
of this information are expected to refer to the relevant existing provisions of
applicable Laws. The user of the information agrees that the information is not
a professional advice and is subject to change without notice. I assume no
responsibility for the consequences of use of such information. IN NO EVENT
SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE
RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE
INFORMATION. This is only a knowledge sharing initiative and author do not
intend to solicit any business or profession.
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