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How to transfer / claim physical share certificate of deceased shareholder?

How to transfer / claim physical share certificate of deceased shareholder?

23, Jul 2018

Are your holding physical share certificate of the deceased shareholder? Confused, what to do with share certificate left behind by deceased shareholder?

If you are holding the physical share certificate of deceased shareholder then it is quite often that many dubious questions must have arisen in your minds such as how to get that share certificate issued in the name of legal heir or nominee. Are those certificates just papers having no value? Those physical share certificate lying with you are not worthless paper. Those share certificate can be transferred in the name of the legal owner.

Companies Act clearly demarcate between Transfer and Transmission of Shares.

Transfer of Shares: Transfer of shares refers to the transfer of title to shares, voluntarily by one party to another.

HOW TO GET NAME CHANGE ON SHARE CERTIFICATE OF DECEASED FAMILY MEMBER

If you are in custody of physical share certificate of the deceased family member, you should get a name changed on those certificates to become the legal owner of such share certificate.

If share certificate remains in the name of the deceased holder, it cannot be sold until the transfer of such shares in the name of the new legal owner.

Check whether shares were held singly or jointly, in case of jointly holding, shares will get transferred in the name of the joint holder. On the other hand, shares were held in the single name, these shares will get transferred in the name of the nominee.

PROCEDURE TO NAME CHANGE ON SHARE CERTIFICATE OF DECEASED

  1. Initially Check the legal status of a company whether the company still exist or there has been named change or taken over or under liquidation or merged with another company.
  2. After the preliminary check is done a written application for name change shall be made to the Registrar and Transfer Agent or to the Share Department of the company.
  3. Joint holder if any, should sign a request letter.
  4. After examining the documents, a company will issue a physical share certificate in the name of (nominee, joint holder, legal heir)

DOCUMENTS TO BE SUBMITTED WITH APPLICATION FOR TRANSMISSION OF SHARE

  1. Physical share certificates
  2. Transmission request form
  3. Death certificate of the deceased
  4. PAN Card of a successor
  5. Bank attested signature of a successor
  6. Proof of address of the successor
  7. Any other documents as may be required by the company

Who is legal Heir?

The property of deceased dying intestate or without the will would be given to legal heirs. Hindu Succession Act, 1956 defines the order and the person who will become the legal heir of deceased. For eg. In case the husband dies, his wife, son’s, daughter’s will become his legal heir.

ROLE OF COURT IN CASE OF TRANSMISSION

In case shareholder dies without leaving a will and the value of shares exceeds Rs 2 Lakhs then succession certificate shall be required. In other words, if the value of the physical share is less than Rs 2 Lakhs (Less than Rs 5 Lakhs in case of demat) then succession certificate is not required. This is a certificate granted by the court to the legal heir of a person dying intestate. This succession certificate enables the heir to make payment of debt and to get security transferred in his name.

In order to obtain succession certificate, a petition needs to be filed with Court along with the following information:

#. The name and relationship of the person requiring this certificate.

#. Names of all heirs and close relatives of the deceased.

#. Details about the time, date and place of death should be mentioned in the application.

#. Copy of the death certificate needs to be filed along with the application.

#. Details of all movable and immovable properties for which Certificate is sought.

Once the application for succession certificate is filed, the Court will issue a notice to all the legal heirs and close relatives, so that anyone having any objection in the grant of Succession Certificate in favor of Applicant can raise an objection.

Court also publish the notice for application of Succession certificate in the newspaper to inform the public at large and if anybody having any concern can raise an objection. If no one contests the application on the expiry of this period, the court passes an order for issuance of succession certificate and if any objection is raised, the Court will first decide the objections and then proceed further. Generally, it takes 4-6 months to get succession certificate from the court.

Please reach out to Share Samadhan (www.sharesamadhan.com) at samadhan@sharesamadhan.com

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How to file a RERA complaint ?

How to file a RERA complaint ?

23, Jul 2018

The Real Estate (Regulatory and Development) Act, 2016 was enforced on 1st of May 2017, to safeguard the interest of the homebuyers, whereby all the States have to enact their own Real Estate Regulatory Authority before 1st of May 2017, While many states are still running behind the schedule for notifying the RERA Rules, many have notified rules and a regulator have started functioning. Some of these states are Haryana, Uttar Pradesh, Maharashtra, Uttarakhand, Madhya Pradesh and Rajasthan

So before moving further in the process of filing the complaint against the builders or the Real estate agents lets us briefly understand what exactly is RERA.

According to RERA, each and every state is supposed to have its own rules and regulation to regulate its Real Estate Sector, under which the primary objective was a fast track grievance redressal forum with a time-bound process known as Real Estate Regulatory Authorities (RERA). Every State has prescribed its procedure for complaints to RERA, their redressal process and time taken.

RERA addresses the grievances like delay in possession, price, quality of construction, title and other changes.

How to file a RERA complaint?

On the basis of our research and experience, there are some issues for which the buyers are approaching the Complaint Redressal forums such as Faulty constructions, Un-necessary Delay in handing over the possession, Vague demands from the builders etc.

  • Need assistance?

Please reach out to Share Samadhan (www.sharesamadhan.com) at samadhan@sharesamadhan.com

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Convert Physical Shares into Demat Form Before This Deadline; Here is How to do it.

Convert Physical Shares into Demat Form Before This Deadline; Here is How to do it.

11, Jul 2018

Convert physical shares into demat form before December 5, 2018

To keep a check on fraudulent transactions, Securities Exchange Board of India (SEBI) has notified that there will be no transfer of physical shares to demat after December 5, 2018. For transfer of shares, it will be mandatory for you to hold shares in a Demat form. It is a welcome move as companies have often complained that investors holding physical shares at times do not get dividend income due to change in their address. Holding shares in a demat form will help them complete the corporate action.

Vikash Jain, co-founder at Share Samadhan says, “This may be a big problem for pending transfer cases in physical form. One can still hold the share in physical form but cannot transfer post December to anyone unless it gets dematerialized.”

How to convert physical shares into demat form

Vikash Jain explains how to covert physical shares into demat form

  • A shareholder can get his shares dematerialized by submitting a Dematerialization Request Form (DRF) to its Depository Participant(DP). A DP is usually an intermediary between a shareholder and the Depository i.e. NSDl & CDSL.
  • After submission of DRF, a demat request is raised by DP with a unique DRN (Demat Request Number) and the physical share certificates are sent for verification to the concerned authorities (RTA).
  • Upon verification from RTA, the DP team will convert all the physical share certificates into electronic form. It takes approximately 3-4 weeks for the DP team to convert physical shares to Demat Form or electronic form.
  • In case of death of a shareholder before converting shares into demat mode, legal heirs will have to transmit the shares in their name and then get the dematerialization done in their respective names. However if shares are in joint names and one of the joint holder is deceased, the process of Transmission cum demat can be carried out by submitting a single form to DP.
  • In case of loss of physical shares, the shareholder will have to get the duplicate share certificates issued in his name from the Company. After receiving the duplicate share certificates, the shareholder can get his shares dematerialized by filling the DRF. Demat request can be fulfilled only for the companies which are having active ISIN.
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HOW TO CLAIM UNCLAIMED DIVIDEND / SHARE TRANSFERRED TO IEPF?

HOW TO CLAIM UNCLAIMED DIVIDEND / SHARE TRANSFERRED TO IEPF?

09, Jul 2018

WHAT IS IEPF?

Investor Education and Protection Fund (IEPF) is for the promotion of Investors’ Awareness and Protection of the interests of investors in India. Dividend which remains Unpaid or Unclaimed for a period of 7 (seven) years from the date of transfer to special account is transferred along with interest accrued to IEPF.

WHAT AMOUNT GOES TO IEPF?

Following amount (list not exhaustive) shall be credited IEPF.

a)   the amount in the Unpaid Dividend Account of companies remains Unpaid or Unclaimed for a period of seven years

b)   the amount lying in the Investor Education and Protection Fund under section 205C of the Companies Act, 1956;

c)   matured deposits with companies other than banking companies;

d)   matured debentures with companies;

e)   the interest or other income received out of investments made from the Fund;

f)    redemption amount of preference shares remaining unpaid or unclaimed for seven or more years; and

WHEN AMOUNT GET TRANSFERRED TO IEPF?

Any money transferred to the Unpaid Dividend Account of a company in pursuance to section 124(5) which remains unpaid or unclaimed for a period of seven years (7 year and 37 days from the date of declaration of dividend) from the date of such transfer shall be transferred by the company along with interest accrued, if any, thereon to IEPF.

WHETHER INVESTOR CAN CLAIM DIVIDEND /SHARES FROM IEPF?

On 5th September 2016, Ministry of Corporate Affairs had notified Investor Education and Protection Fund Authority (Accounting, Audit, Transfer & Refund) Rules 2016 which allows claimants to seek from IEPF refund.

YES; Investors, whose shares, IEPF unclaimed dividend, matured deposits, debentures, application money or interest has been transferred to IEPF can now seek refund from IEPF.

For claiming such amount, claimant needs to file form IEPF-5 along with requisite documents on the IEPF website

PROCEDURE FOR CLAIMING REFUND

a)   Any person, whose shares, unclaimed dividend, matured deposits, matured debentures, application money due for refund, or interest thereon, sale proceeds of fractional shares, redemption proceeds of preference shares, etc. has been transferred to the Fund, may claim by making an application in Form IEPF 5

b)   The claimant shall send the copy of IEPF5 duly signed by him along with the following requisite documents to the concerned company at its registered office for verification of his claim:

·        Copy of Acknowledgement

·        Indemnity Bond

·        Advance Stamped Receipt

·        Copy of Aadhar

·        Cancelled Cheque

·        Original Certificate

·        Proof of entitlement

·        Copy of Passport, OCI and PIO card in case of foreigners and NRI) as enumerated in Form IEPF-5

c)    The company shall within 15 fifteen days of receipt of claim form, send a verification report to the IEPF Authority as per the format specified by the Authority along with all documents submitted by the claimant.

d)    After verification of the entitlement of the claimant-

o to the amount claimed:  the IEPF Authority and then Drawing and Disbursement Officer of the Authority shall present a bill to the Pay and Accounts Office for e- payment as per the guidelines.

o to the shares claimed: the IEPF Authority shall issue a refund sanction order with the approval of the Competent Authority and shall either credit the shares which are lying with depository participant in IEPF suspense account (name of the company) to the demat account of the claimant to the extent of the claimant’s entitlement or in case of the physical certificates, if any, cancel the duplicate certificate and transfer the shares in favour of the claimant.

e)   The IEPF Authority shall, in its records,  cause a note to be made of all the payments made.

f)    Time Period: An application received for refund of any claim duly verified by the concerned company shall be disposed of by the Authority within 60 sixty days from the date of receipt of the verification report from the company, complete in all respects and any delay beyond sixty days shall be recorded in writing specifying the reasons for the delay and the same shall be communicated to the claimant in writing or by electronic means.

g)   In cases, where the application is incomplete, a communication shall be sent to the claimant by the Authority detailing deficiencies of the application.

h)   In case, claimant is a legal heir or successor or administrator or nominee of the registered security holder, he has to ensure that the transmission process is completed by the company before filing any claim with the Authority.

i)     The claimant shall file only one consolidated claim in respect of a company in a financial year.

IEPF –CLAIM YOUR UNPAID DIVIDEND AND SHARES

In case you or your family/friends have funds lying with IEPF, it is time to track and claim your dues.

Crores of rupees in unclaimed money - right from old Equity Shares amounts to share application money, Dividend, Debentures, Interest accrued thereon and many more - is piling up but rightful owner are yet to understand the procedure to claim back from Govt fund.

Several reasons for dividend does not get claimed

Lost track of the funds owed to you.

Company/financial institution might have failed to locate Shareholder for dividend payment as contact and bank details change over the years but are not updated with company.

You were not aware of the investments made by your parents/; neither you had the complete records of those investments.

The process of claiming investment back from IEPF is cumbersome and long legal process involving form filing and serious continuous follow ups with authorities. But we should be happy with the fact that at least our investment in IEPF is safe with Government rather than being victimised with Fraudulent withdrawal of investment like sharepro case.

Need Assistance

In case, you need the assistance for same, Please reach out to Share Samadhan (www.sharesamadhan.com) at samadhan@sharesamadhan.com

T: 011 4908 4003

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Holding benami Physical Shares ? Time to write off your Investment.

Holding benami Physical Shares ? Time to write off your Investment.

03, Jul 2018

SEBI tightening the screws…..In pursuance of SEBI circular, Securities holders holding securities in physical mode shall submit a copy of PAN and bank details (a copy of the PAN card and original canceled cheque leaf /attested bank passbook showing the name of account holder) within 21 days from the date of receiving notice from Issuer Companies through their RTAs.

RTAs is under obligation to send a letter under registered/Speed post seeking PAN and bank details within 90 days from the date of this circular (which is dated 20th April 2018) and two reminders thereof after the gap of 30 days. All the 3 letters will have 21 days’ notice period to provide the details.

In case holder is the residence of Sikkim, PAN card can be substituted with valid Identity proof issued by Government.

Main Objectives

To keep a check on the wrong payment or return of dividend, interest, warrants etc and ensure smooth functioning and administration thereof. This will restrain Benami transaction also.

Although updating PAN and Bank Detail is a small change but its implication is much higher.

After effect of the Amendment:

This amendment will bring the followings changes:

  • Eliminating fraud and manipulation in payment of dividend, warrant, interest etc. to holders holding securities in physical.
  • Chances of Benami Transaction will be reduced to greater extent.
  • The proper & Adequate record will be available and linked to each folio.

What if PAN and Bank particulars not updated?

Securities holders who are unable to respond to RTA call/notice and not able to provide PAN and bank details within 180 days of the circular or have informed that the securities available in their name as per the records of RTA does not belong to them, shall be subject to enhanced due diligence by Issuer Company.  Let’s see how RTA / company would respond to those cases…

Can holder continue to hold shares in Physical form?

Yes, the holder can continue to hold the shares in physical form but whose ledger folios do not have/ having incomplete details with respect to PAN and Bank particulars are mandatorily required to furnish these details to the issuer company / RTA for registration in the folio.

Need assistance?

Please reach out to Share Samadhan (www.sharesamadhan.com) at samadhan@sharesamadhan.com

T: 011 4908 4015

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