Investor Education and Protection under Companies Act, 2013

1. Power to  whom Section 125(1)

CG shall have power to established a fund to be called the Investor Education and Protection Fund.

2.What types of amount to be credited to the Fund Section 125(2) and Rule 3

1. Amount given by the CG by way of grants after due appropriation made by Parliament by law in this behalf for being used for the purpose of the IEPF.

2. Donations given to the IEPF by the CG, SG, Companies or any other institution  for the purposes of the fund;

3. The unpaid dividend account of companies transferred to IEPF under section 124(5)

4. The General revenue account of the CG which had been transferred that account under section 205A(5) of the Companies Act, 1956, as it stood immediately before the commencement of the Companies (Amendment) Act, 1999 and remaining unpaid or unclaimed on the commencement of this Account.

5. The Amount in IEPF under section 205C of the Companies Act, 1956.

6. The investment or other income received out of investment made from the IEPF.

7. The amount received under section 38.

8. Application money received by the Company for allotment and the amount is due for refund.

9. Matured deposits other than the case of Banking Companies;

10. Amount received on sale of fraction shares out of issuance shares of bonus shares, merger and amalgamation for 7 or more year.

11. Redemption amount of preference shares remaining unpaid for 7 or more years ;

12. All shares as per Section 124(6);

13. Resultant benefits arising out of shares held by the IEPF authority;

14. All Fees, Charges, grants received by IEPF Authority;

15. All sums received by IEPF authority from such other sources as may be decided by the CG;

16. Income earned by the IEPF authority in any year;

17. Amount payable in Under banking act;

18. Any unpaid or unclaimed interest shall be transferred to the IEPF, in case of term deposit and debentures of Companies;

19. Such other sums as may be prescribed in rule 3.

*Note- No such amount as mentioned from points 8 to 11 transferred to IEPF, after the expiry of period of 7 years as per the provisions of the Companies act, 1956, shall be entitled to get refund out of the fund in respect of such claims in accordance with rules made under this section.

3. Constitution of Authority Section 125(5)

The CG shall have the  power to constitute, an IEPF authority for the administration of IEPF-

Authority shall consist of –

a. Chairperson and

b. Not exceeding 7 Members  and

c. CFO

4.Duties of IEPF Authority Section 125(8)

1. Administer the IEPF;

2. Maintained Separate Accounts;

3. Maintained relevant records relating to the fund

5. Audit of Accounts of the funds Section 125(10)

Audit shall be done by the CAG;

Audit shall be done at such interval as may be specified and such audited accounts together with the audit report shall be forwarded annually by the authority to the CG

6. Annual report by  IEPF Authority Section 125(11)

Authority shall prepare in  such form and in such manner the annual report giving a full account of its activities during the financial year and a copy of the same shall be forwarded to the CG and the CG shall cause the annual report given by CAG to be laid before the both house of Parliament.

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October 2020