Pursuant to section 125 of the Companies Act, 2013, the Central Government has established a Fund called Investor Education and Protection Fund (IEPF) which is credited, inter- alia, with the amount of dividend remaining unclaimed / unpaid for a period of 7 years from the date they are transferred to Unpaid Dividend Account.
The Ministry of Corporate Affairs (MCA), vide its notification dated September 5, 2016 has notified the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“IEPF Rules”), effective from September 7, 2016, whereby companies are required to identify and upload information regarding unclaimed amounts due to be transferred to IEPF on the website of the Ministry of Corporate Affair as well as on Company’s own website.
Accordingly, such unpaid / unclaimed amounts along with their respective due dates for transfer to IEPF are provided for the benefit of shareholders. The shareholders may claim their unclaimed / unpaid amount due to them by making an initial application to the IEPF Authority followed by application to the Company as per the procedure laid down in rule 7 of the IEPF Rules, along with the requisite documents, before such amount is transferred to IEPF. Once unclaimed dividend is transferred to IEPF, no claim shall lie in respect thereof either with the Company or IEPF.