A share in gains made by a corporation disseminated to every shareholder is known as a dividend. The quantity and quality of Dividends are determined and proclaimed by the Board of Directors of the company.
There can be a definitive or provisional Dividend, where the final is announced at the top of the economic year, and the Dividend announced on a regular quarterly or half-yearly basis is a provisional Dividend.
Dividends are reimbursed on a predetermined date; if asserted Dividends are not reimbursed until the payout date, it is called Unpaid Dividends. A dividend paid by the corporation but not yet contended or taken by the shareholder is called an Unclaimed Dividend. It is reimbursed by the company on request and is a penalty for the corporation.
What is IEPF?
IEPF stands for investor education and protection fund. It is used to promote awareness in investors’ minds and, at the same time, protect their interests. It is utilized in many ways for different things, such as it helps with getting a refund of unclaimed dividends, matured deposits and debentures, and application money which is due for refund or interest. It also helps promote education, protection, and awareness for an investor.
At the same time, the distribution of the amount which is eligible and not paid is identified by the applicants for shared debentures and debenture holders. It has to be paid according to the court order with the help of this.
They also help in providing reimbursement of all kinds of legal expenses incurred while pursuing any kind of class sought under section 245. IEPF’s unclaimed dividend has helped in many ways with special methods and techniques.
Transfer of Unclaimed Dividends to IEPF
Many times certain types of amounts or unclaimed dividends are transferred to IEPF if they are paid or unclaimed for more than seven years and the interest or accrued interest is transferred along with it to the IPS.
And the company can then send a statement in form with the details Transfer these to the authority and then the authority will fund or receipt to the company which shows evidence of this particular transfer.
Is IEPF good or bad?
It is said to be a very smart act as it helps people and companies from falling into any kind of fraud. The money, if not given to the shareholders, comes to the funds and authorities of IEPF and is not exploited by the company members. Some ways can help people get their money back from IEPF if taken care of and proper steps are followed.
What does the If take?
The payment in the unpaid dividend statement is assigned to the IEPF by the firms when they stay outstanding/unclaimed for seven years from the date of transfer. The company will assign the unpaid dividend account amount along with the stake accrued, if anything, to the IEPF.
More about IEPF
The authorities of IEPF are interested in a special type of responsibility which is administering the investor education and protection fund, making refunds of various types of shares, acquiring and claiming dividends as well as taking care of Metro deposits and debentures. They help in promoting awareness to people about investors and they also protect the interest of all investors.
To conclude, the services of Iepf in acquiring unclaimed dividends are commendable and highly recommended. They help in searching the unclaimed amounts, claiming refunds, checking forms, and other items related to firms and accounts.
Hence, now unclaimed dividends cannot be kept for more than 7 years and they can be given to IEPF by the company and the money stays with them in the process.