Procedure to Claim unpaid dividend by shareholders when the shares have already been transferred to Investor Education and Protection Fund (IEPF)


Overview: when the shareholder fails to claim his/ her dividend on share for a long period of time (around 7 years) then in accordance with the provisions of Companies act 2013, the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017 the unclaimed dividend gets transferred to the IEPF. The investor is able to claim the dividend which has remained unpaid from IEPF.


Purpose: The provision of the Companies Act 2013 require the company to transfer the unpaid dividend to IEPF established by central government after the expiry of a period of 7 years. As per section 125(2) of the Companies Act and IEPF Rules 2016, certain amounts are required to be credited to the Fund (IEPF) which include - donations given to the Fund by the Central Government, State Governments, companies or any other institution for the purposes of the Fund, amount transferred to the Unpaid Dividend Account of a company and which remains unpaid or unclaimed for a period of seven years from the date of such transfer, the amount lying in the Investor Education and Protection Fund under section 205C of the Companies Act, 1956, the application money received by companies for allotment of any securities and due for refund which has remained unclaimed and unpaid for a period of seven years from the date it became due for payment, matured deposits with companies other than banking companies which has remained unclaimed and unpaid for a period of seven years from the date it became due for payment, matured debentures with companies which has remained unclaimed and unpaid for a period of seven years from the date it became due for payment, redemption amount of preference shares remaining unpaid or unclaimed for seven or more years, due, unpaid or unclaimed interest on matured deposits transferred to the Fund, due, unpaid or unclaimed interest on matured debentures transferred to the Fund etc. These amounts have to be transferred by the company to the fund within a period of thirty days from the date of expiry of seven years from the date of transfer of amount to the unpaid dividend account.

The purpose of this article is to serve as a general guide for claim such unpaid dividend by the shareholder from the IEPF.

Areas of Application of Law: Companies act 2013, the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017

Process: the shareholder can claim dividend from of the last seven years which has not been received by him/ her and the dividend which has already been transferred to the Investor Education & Protection Fund (IEPF) which has been established by the central government by making an application in Form IEPF 5 online available on website www.iepf.gov.in along with fee, as decided from time to time in consultation with the Central Government, under his own signature. Thereafter, the claimant shall send the same duly signed by him along with, requisite documents as enumerated in Form IEPF-5 to the concerned company at its registered office for verification and processing of his claim which shall be verified by the company based on which report, refund will be released by the IEPF Authority in favor of claimants' Aadhaar linked bank account through electronic transfer.

Documents required to be submitted: IEPF 5, see http://www.iepf.gov.in/IEPFA/refund.html for details

Punishment/Expected Relief: claiming the unpaid dividend from IEPF

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