REFUND OR RECLAIM FROM IEPF


Ministry of Corporate Affairs amended the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016. The Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Second Amendment Rules, 2019 rules published in Official Gazette on 14th August 2019. In this post, we will discuss amended provisions related to refund of such amount and shares related to unpaid dividend transferred to the Investor Education and Protection Fund Authority. Amendment relevant to this post comes into effect with effect from 20th September 2019 except fraudulent claim and deceitful impersonation related provisions under Rule 7(11) which came into effect on 20th August 2019.

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EFFECT OF TRANSFER OF SHARES TO IEPF


Sub – Section (6) of Section 124 mandates transfer of all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more in the name of Investor Education and Protection Fund along with a statement containing such details as prescribed. Rule 5 of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 prescribe the manner of such credit.  We discussed procedure amended with effect from 20th August 2019 in the last post here. In this post, we will discuss the post-transfer effects and procedures.

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TRANSFER OF SHARES RELATED TO UNPAID DIVIDEND


Sub – Section (6) of Section 124 mandates transfer of all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more in the name of Investor Education and Protection Fund along with a statement containing such details as prescribed. Rule 5 of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 prescribe the manner of such credit.  The procedure is now amended with effect from 20th August 2019.

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CREDIT OF CERTAIN AMOUNTS TO IEPF


Section 124 of the Companies Act, 2013 and other provisions of laws mandates credits of certain amounts to the Investor Education and Protection Fund (IEPF). Rule 5 of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 prescribe the manner of such credit.  The procedure is now amended with effect from 20th August 2019. We will discuss the updated process which is more logical and easy to comply.

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COMPANY UNDER IEPF RULES


Since the introduction of Investor Education and Protection Fund (IEPF) in the year 2001, I have a keen interest in the law related to investor protection, particularly under the Companies Law. Presently, one of the significant but neglected features of the IPEF Rules is the definition of the Company. The definition has been amended several times to keep track of silent changes of several laws without much notice of the stakeholder.

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DECLARATION OF NIDHI


On 31st July 2019, the Companies Amendment Act, 2019 was notified. The Companies Amendment Act, 2017 is still being implemented. Earlier, the Notification S.O. 2269 (E) dated 1st July 2019 appointed 15th August 2019 as the date on which the provisions of section 81 of the said Act shall come into force. Accordingly, on this 15th August 2019, Section 406 of the Companies Act, 2013 stand replaced by another old school enactment of the law. Brief Discussion on U-turns.

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KASHMIR AND THE COMPANIES ACT


The Monday 5th August 2019 witnessed a powerful and joyful celebration of Indian Unity and also an unfortunate revelation of various misconceptions of minds of thousands of Indians. Social media witnessed the flow of social and legal bias established by the most lethal weapon of human history – the half-knowledge. Soon, overflowing sentiments overpowered the knowledge, understanding and interpretation even of well dignified professional minds.

A section of professionals claimed that the Indian Companies Act, 2013 shall now be applicable to state (now Union Territory) of Jammu and Kashmir. Strange!!

We will try to remove the misconception of mind here.

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