Procedure for transfer of shares to IEPF–Step by Step–with Sample Documents

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:

• CS or any other authorised Director will make an application to the Company on behalf of the Shareholder, for issue of new Share Certificate.
• on receipt of the application, a new share certificate for each such shareholder shall be issued and it shall be stated on the face of the certificate that
• “Issued in lieu of share certificate no. for the purpose of transfer to IEPF” and the same be recorded in the register maintained for the purpose;
• after issue of a new share certificate, the company shall inform the depository by way of corporate action to convert the share certificates into DEMAT form and transfer in favour of the Authority.“

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

BOARD RESOLUTION

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

Name-

Designation-

Date:

***********

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. : ________________________

Date: ______________

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	:
2	ISIN	:
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)
(i)	NSDL
(ii)	Unclaimed Suspense Account held with NSDL
(iii)	CDSL
(iv)	Physical Form
	Total

I, ____________________________ (person name), ______________________ (designation) of ________________________________ (issuer name) state and confirm the following:

• Board of the company has authorized the undersigned to effect transfer/transmission of shares to IEPF and sign the necessary documents
• Company has informed the shareholder concerned regarding transfer/transmission of shares to IEPF Authority
• Company has published notice in the newspaper informing details of shareholder concerned are available on the website of the company
• that all necessary approvals for the aforesaid debit/credit of shares are obtained and are in compliance with all relevant laws, as may be applicable.

Signature:

Notes:

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

Note:

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.

To,
Operations Department
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.

Dear Sir,

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

• Debit securities in CDSL BO A/c and credit IEPF Account with CDSL.
• Debit securities in CDSL BO A/c and credit IEPF Account with NSDL
• Credit securities to the IEPF Account with CDSL in respect of NSDL BO A/c
• Credit securities to the IEPF Account with CDSL in respect of Physical holders
• Credit non monetary benefits to the IEPF Account with CDSL

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
ISIN
Security Description
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)
CDSL
NSDL
Physical
Total

ANNEXURE – E

The Details of the IEPF Account to be credited is as follows:

Name of the Applicant		BO ID	Quantity
Investor	Educationand
Protection	Fund  Authority
Ministry of Corporate Affairs.
DECLARATION
I, ………………………….., state and confirm that :

• All the requirements of the Companies Act, 2013 and the rules made thereunder in respect of the subject matter and matters incidental thereto have been complied with. I further declare that all the information given herein above is true and correct and complete.
• The Transfer of shares is being effected only in respect of the shares where the BO has not encashed any dividend warrant during the last seven years as per the IEPF (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017.
• The Company has informed, at the latest available address, the shareholder concerned regarding the transfer of shares three months before the due date of transfer of shares and has also published a notice in the leading newspaper in English and Regional language informing the concerned that the names of such shareholders and their folio no. or DP ID-Client ID are available on their website duly mentioning the website address.

• In respect of physical shares, we confirm that the procedure as specified under Rule 6, sub-rule 3, clause (d) of the IEPF (Accounting, Audit,Transfer and Refund) Amendment Rules, 2017 has been complied with.

Name:

Designation:

Signature:

(Company Stamp)