Transfer (Deemed Transmission) of Shares to Investor Education and Protection Fund (IEPF)
MCA has issue Notification on 13th October, 2017 in respect of clarification on transfer of shares of Company to “IEPF”.
As per Section 124(6) of Act, 2013 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.
As per Rule 6(1) The shares shall be credited to DEMAT Account of the Authority to be opened by the Authority for the said purpose, within a period of thirty days of such shares becoming due to be transferred to the Fund.
NOTE – I:
As per above mentioned provisions of the Act Company have to transfer the “SHARES” to IEPF within 30 days of from the date of completion of 7 years.
Relaxation by Ministry: However, MCA has amended the Rules by Second Amendment Rules, dated 13.10.2017 i.e. “in cases where the period of seven years provided under sub-section (5) of section 124 has been completed or being completed during the period from 7th September, 2016 to 31st October, 2017,the due date of transfer of such shares shall be deemed to be 31st October, 2017.”
Rules pursuant to transfer of Shares to IEPF came into effect from 07th September, 2016, Therefore, every company whose 7 year completing between 07.09.2016- 31.10.2017 have to transfer the shares to IEPF with relaxation period till 30th November, 2017.
NOTE – II:
This process of Transfer of shares by Companies to the IEPF shall be deemed to “Transmission of Shares”.
NOTE – III:
The procedure to be followed for transmission of shares shall be followed by the companies while transferring the shares to the fund. Procedure for transmission of shares given under section 56 of the Act.
Now few days are there to meet due date i.e. 30.11.2017.
(Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at firstname.lastname@example.org). 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.