STEP BY STEP PROCEDURE FOR TRANSFER OF SHARES TO IEPF AUTHORITY
In my previous article I have discussed about the Compliances of Unpaid/Unclaimed dividend that a Company has to follow. Continuing the same, in this article I will be providing the practical aspect of the procedure of Shares transfer to IEPF authority alongwith sample documents used in this process.
As per Section 124 (6) of the Companies Act 2013, Company shall transfer all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more to the Investor Education and Protection Fund. Following are steps which we need to follow for such transfer:
1. Conduct a Board Meeting, discuss the matter and pass a resolution for authorising the CS or any one of the Director for executing the procedure and signing all the relevant documents as required for transfer of Shares.
2. Ask the RTA to provide list of shareholders whose shares are due to be transferred.
3. Atleast 3 months prior to the shares becoming due to be transferred, send an intimation to shareholders stating that the dividend on these shares has not been claimed for 7 consecutive years and if not claimed within the given period the said shares will be transferred to IEPF authority.
4. Company will provide a date in the Intimation till when a shareholder can claim their dividend so as to save their shares from transfer to IEPF Authority.
5. Simultaneously, Company will publish such intimation along with the sheet of the Shareholders whose shares are due to be transferred to their website including the name of such shareholders and their DP ID/ Client ID.
6. On the same date when Intimation is sent, Company will publish a notice in the newspapers, one in the local language in which registered office is situated and other in an English newspaper stating that Company is undergoing the procedure of shares transfer and individual intimation has already been sent to all shareholders, whosoever, wants to claim their shares need to contact the Company or RTA before the given due date. Also, Company will mention the link of the Website where such intimation is published.
7. Once the due date given in the intimation for claiming shares has expired, Company will again ask RTA to share the final data of shares to be transferred.
8. These shares need to be transferred in the Demat Account of the IEPF Authority. As per General Circular No. 12/2017 dated 16.10.2017, the IEPF authority has opened demat account with NSDL and CDSL through Punjab National Bank and SBICAP securities Limited respectively, as Depository participants. Details of the Accounts are:
Particulars PNB SBICAP
DP ID IN300708 12047200
Client ID 10656671 13676780
9. We need the following details from the RTA for further procedure: –
Particulars No. of records No. of Shares
NSDL X X
CDSL X X
Physical X X
10. For shares in demat form, once the above-mentioned data is received, Company shall inform through RTA to the depositories by way of Corporate Action Forms for transfer of shares to IEPF authority’s respective Demat Account. Also Depositories charge some fees, which need to be paid for transfer of Shares in the IEPF Demat Account.
11. For Shares in Physical form:
12. Once all the shares are transferred, Company will receive the confirmation from RTA as well as the respective Depository regarding the same.
13. Within 30 days from the date of Corporate Action, we need to file Form IEPF-4 with MCA containing details of such transfer and the Company also had to attach the Public advertisement given to the shareholders in the beginning.
14. The voting rights on such shares shall remain frozen until the correct owner claims them.
15. Any further dividend on such shares shall be credited to the Investor Education and Protection Fund and a statement stating such details shall be filed by the Company in E-form IEPF-7 with MCA within 30 days of such transfer.
On company’s letterhead
CERTIFIED COPY OF THE RESOLUTION PASSED AT THE MEETING OF THE BOARD OF DIRECTORS OF ABC LTD. HELD ON _______(DATE) AT ___________________(VENUE) AT _______________ (TIMING).
“RESOLVED THAT pursuant to the provisions of Section 124(6) of the Companies Act, 2013 (“the Act”) read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“IEPF Rules”), the Board of Directors do hereby authorize ________________, Company Secretary to sign, execute and file all such documents, slips, certificates, applications and forms, as may be required, from time to time, to transfer the equity shares, in respect of which unpaid /unclaimed dividend is transferred to Investor Education & Protection Fund by the Company and is lying unpaid / unclaimed for seven consecutive years or more, to Investor Education & Protection Fund Suspense Account (“IEPF Suspense Account”);
RESOLVED FURTHER THAT ________________, Company Secretary, be and is hereby authorized to do / perform such acts, deeds or things, as may be required to comply with the provisions of the said Act and IEPF Rules.”
//certified true copy//
FOR, ABC LIMITED
FEES PAYMENT CALCULATION FOR NSDL FOR TRANSFER OF SHARES TO IEPF:
i. Corporate action fee for NSDL to NSDL and NSDL to CDSL is Rs.10/- per record (subject to minimum of Rs. 1000/-) plus applicable GST
ii. Corporate action fee for Physical to NSDL and CDSL to NSDL is Rs.1000/- per corporate action plus applicable GST
iii. Special processing charges for online corporate actions; minimum of Rs. – 2,500/-and maximum of Rs. 20,000/-per corporate action.
iv. Fees for maintaining demat account of IEPF Authority (as may be notified by NSDL based on MOU finalized with IEPF Authority).
CDSL FEES CALCULATOR
|No.||Type of Corporate Action||Debit||Credit||Charges in (Rs.)|
|1.||Transfer of Shares from CDSL BO A/C to CDSL IEPF A/C||CDSL||CDSL||Rs.10/- per Debit record subject to minimum Rs.1000/- per file plus GST as applicable|
|2.||Transfer of Shares from NSDL BO A/C to CDSL IEPF A/C||NSDL||CDSL||Rs.1000/- per file plus GST as applicable|
|3.||Transfer of Shares from CDSL BO A/C to NSDL IEPF A/C||CDSL||NSDL||Rs.10/- per Debit record subject to minimum Rs.1000/- per file plus GST as applicable|
|4.||Transfer of Shares from Physical Holders to CDSL IEPF A/C||NA||CDSL||Rs.1000/- per file plus GST as applicable|
|5.||Suspense Account Debit||CDSL||NA||Rs.1000/- per file plus GST as applicable|
|6.||Credit of shares to CDSL IEPF account in respect of shares debited from suspense account held with CDSL||NA||CDSL||Rs.1000/- per file plus GST as applicable|
NSDL Corporate Action Form
To be printed/typed on Issuers’ letterhead
CORPORATE ACTION INFORMATION FORM
(For transfer/transmission of shares whose dividend is unpaid/unclaimed for seven years to the demat account of the IEPF Authority)
Ref. No. : ________________________
National Securities Depository Limited
Trade World, 4th Floor, A Wing
Kamala Mills Compound, Lower Parel
Mumbai – 400013
We wish to inform you that the company intends to transfer/transmit the shares of the company held by investors pursuant to Section 124 (6) of Companies Act, 2013 and the Rules notified thereunder whose dividend is unclaimed/unpaid for seven years to a demat account of the Investor Education and Protection Fund Authority (IEPF) Authority. For the purpose of transfer/transmission of shares, we intend to execute a corporate action to debit shares lying in dematerialized form in NSDL/CDSL and have made necessary entries in respect of shares held in physical form and credit the shares by way of a corporate action to the demat account of IEPF Authority in NSDL. For shares which are held in unclaimed suspense account and are to be transferred/transmitted to IEPF Authority, if any, the shares which are held in dematerialized form will be debited and necessary entries will be made in the register of the company. Consequently, the shares will be credited by way of corporate action to the demat account of IEPF Authority. The credits will be effected in the demat account of IEPF Authority only to the extent and to those accounts which have been successfully debited. Details are given below:
|1||Name of the company||:|
|3||Financial Year for which the unpaid/unclaimed dividend pertains to for which the underlying shares are to the transferred/transmitted to IEPF||:|
|4||Due date of transfer in terms of IEPF Rules||:|
|5||Details of demat account of IEPF Authority|
6. Details of shares to be transferred/transmitted to the IEPF Authority
|S. No.||Shares held in||Number of records||Number of shares (Quantity)|
|(ii)||Unclaimed Suspense Account held with NSDL|
I, ____________________________ (person name), ______________________ (designation) of ________________________________ (issuer name) state and confirm the following:
1. Ensure that the above details reach NSDL at least three days before execution of the corporate action.
2. The form should be signed by the Company Secretary or Managing Director or a person duly authorized by the Board of the company
3. For execution of corporate action, you will have to advise your R & T Agent / Registry Division.
CDSL Corporate Action
For Providing Details of Corporate Action to transfer shares to IEPF Authority
1. The entire form is to be forwarded on the letterhead of the Company duly signed by the Company Secretary /Managing Director/Person authorized by the Board.
2. Write N.A wherever not applicable.
Central Depository Services (India) Limited
Marathon Futurex, Unit No. 2501
25th Floor, A-Wing, Mafatlal Mills Compound,
N M Joshi Marg, Lower Parel,
Mumbai – 400 013.
We wish to execute the following corporate action with respect to transfer of shares to the Account of the Investor Education and Protection Fund (IEPF) Authority as per the IEPF (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017
The credits will be effected in the demat account of the IEPF Authority only to the extent of those accounts which have been successfully debited.
|Name of the Company|
|Due date of transfer in terms of IEPF Rules|
|Details of shares to be transferred / transmitted to the IEPF Authority|
|Shares held in :||Number of records||Number of shares (Quantity)|
ANNEXURE – E
The Details of the IEPF Account to be credited is as follows:
|Name of the Applicant||BO ID||Quantity|
|Ministry of Corporate Affairs.|
|I, ………………………….., state and confirm that :|