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How Financial Consultants Benefit Your IEPF Claims?

17, Jan 2024
How Financial Consultants Benefit Your IEPF Claims?

IEPF claims to stand as a beacon for dormant wealth, often overlooked and forgotten by investors. Understanding the significance of these claims, especially concerning unclaimed property, requires navigating through critical timelines, legal nuances, and the expertise of a financial consultant.

Let's delve into the realms of IEPF claims, shedding light on their intricacies and the indispensable role played by financial consultants.

Introducing IEPF- The Safet Net

The central government established the Investor Education and Protection Fund (IEPF) by the Companies Act. IEPF is a reservoir. It holds unclaimed shares, dividends, matured deposits, and other assets that are transferred to it after a predetermined amount of time in custody. Managed by the Ministry of Corporate Affairs (MCA) in India, this fund safeguards investors' interests, ensuring that unclaimed financial assets are put to good use.

Principal Goals of the IEPF:

  • Protect investors' matured deposits, debentures, unpaid dividends, etc.
  • Encourage investors to become more informed and conscious.
  • Refund investors any unclaimed funds based on verified claims.
  • After the necessary time has passed, make good use of the invested funds for awareness campaigns.

Companies need to adhere to IEPF requirements to transfer shares, dividends, and other benefits that remain unclaimed after seven years. This gives investors enough time to make their rightful claims. If they are not claimed, the funds are placed in the IEPF, where they might be retrieved through a formal procedure or with the help of financial consultants.

Critical Timelines: Why Time is of the Essence

Transferring unclaimed dividends and shares to the IEPF follows specific timelines. Unclaimed dividends are required to be transferred to the IEPF after seven years, while shares follow a timeline of three years of dormancy. If timely action isn't taken, these assets become part of the IEPF, and the window for individual claims begins.

7 Year Period

The seven years are computed starting from the date of declaration for dividends, the date of maturity for matured deposits, and the date of disbursement for shares.

By Section 124(6) of the Companies Act, the underlying shares may also be transferred to the IEPF if a shareholder does not make dividend claims for seven years or more.

10 Year Period

“The Time Frame for IEPF Amount Claims”

Investors may reclaim funds transferred to the IEPF within ten years (or sooner than seven years) of the transfer date, after which the funds are irreversibly invested into the fund.

Among other benefits, the ten-year period provides a sizable opportunity for reclaiming unclaimed dividends, shares, sale proceeds, and matured deposits. Early filing increases the likelihood of a full recovery.

IEPF Search: Navigating the Digital Realm

For those seeking to reclaim their lost financial assets, the IEPF search is a digital lifeline. Investors can utilize online platforms to conduct an IEPF search for unclaimed dividends and shares. These searches provide visibility into the status of their claims, including whether the claim is pending approval or has been successfully processed.

Role of a Financial Consultant: Guiding the Claim Journey

Understanding Legal Complexities:

  • The process of IEPF claims involves legal intricacies. A financial consultant acts as a knowledgeable guide, helping investors navigate through the legal framework, ensuring compliance, and maximizing the chances of a successful claim.

IEPF Shares Search: Leveraging Expertise:

  • An IEPF shares search can be a daunting task. A financial consultant, equipped with industry knowledge and experience, can streamline this process, ensuring no stone is left unturned in the quest for unclaimed shares.

Unclaimed Dividend Transfer to IEPF: Ensuring Efficiency:

  • The transfer of unclaimed dividends to the IEPF involves specific procedures. A financial consultant aids in the seamless execution of this process, ensuring efficiency and adherence to regulatory requirements.

Records Required to Submit Claims

  • signed copy of Form IEPF-5
  • Identity verification certificates like Aadhaar or PAN.
  • Evidence of residence certificates like Aadhar card or electricity bill.
  • A copy of the dividend warrant, share certificate, etc.
  • Canceled check leaf with the claimant's bank information
  • Statement of demat account copy for electronic share credit.
  • A non-judicial stamp paper indemnity bond for misplaced share certificates.
  • A notarized affidavit outlining the claim's facts.
  • Certificate of legal heirship, if any, or nomination.
  • Evidence of a bank account, such as a statement proving an earlier electronic dividend payment.
  • Prepare all necessary paperwork in the designated forms to guarantee a smooth settlement of claims. Save the originals securely in case you need them later.

Why a Property Becomes Unclaimed?

Understanding why a property becomes unclaimed is pivotal. Properties may become unclaimed due to factors such as changes in residence, oversight in updating contact information, or even the passing of the rightful owner. Financial consultants bring this understanding to the forefront, emphasizing the importance of proactive measures to avoid assets falling into the unclaimed category.

Top reason dividends and shares remain unclaimed:

  • A shareholder may not receive dividends or other pertinent corporate communications if they change their address or contact information without notifying the firm or the registrar and transfer agency (RTA).
  • Mistakes when entering bank account information or names cause electronic dividend payments to be declined.
  • Due to ignorance, the shares and dividends of departed stockholders remain unclaimed by their legal heirs.
  • Shareholders who physically possess securities, but whose certificates gradually disappear.
  • A general lack of knowledge among shareholders about the rights and actions of corporations.
  • Oversight and lack of knowledge about claim procedures among minor shareholders.

Conclusion

In the realm of IEPF claims, the role of a financial consultant is not just advisory; it's transformative. As individuals navigate the landscape of unclaimed dividends, shares, and the procedural intricacies of the IEPF, a financial consultant becomes the guiding light. From conducting an IEPF search to facilitating unclaimed dividend transfers, their expertise ensures that every step is taken with precision. In the pursuit of reclaiming lost financial assets, a financial consultant is not just a guide; they are the key to unlocking a realm of financial possibilities.

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