Information on IEPFholdings^tm

Description and origin of IEPF

We have always been guided to invest and forget, we need to correct that now: “Invest and forget but keep the KYC and nomination details updated”.

There are abundant cases when one buys some shares and due to untimely death or disease loses track of the investment and forgets to tell their successors. Hence there arose a need to regulate the handling and processing of such lost and forgotten investments and wealth whereby the Government of India enacted theSections 124 and 125 of The Companies Act, 2013,wherein it is provisioned that the shares whose dividends are unclaimed for a consecutive period of 7 years are transferred to a government authority called IEPF (Investor Education and Protection Fund) Authority.

IEPF Authority

For administration of Investor Education and Protection Fund Government of India has on 7th September, 2016 established Investor Education and Protection Fund (IEPF) Authority under the provisions of section 125 of the Companies Act, 2013.

The Authority is entrusted with the responsibility of administration of the Investor Education Protection Fund (IEPF), make refunds of shares, unclaimed dividends, matured deposits/debentures etc. to investors and to promote awareness among investors.

IEPF FORM 5

IEPF Form 5 is the last stage of claiming shares from the IEPF Authority. However, every company and registrar first directs the investor in filing IEPF Form 5 and sending the same to them. IEPFholdings^tm assists in fulfilling all requirements to enable an investor fill IEPF Form 5 by undertaking change of address, updating of signatures, issue of duplicate share certificates and other formalities for company’s records.

TRANSMISSION OF SHARES

Transmission of shares at times is hugely cumbersome and runs into many legal complications. IEPFholdingstm help our clients by providing services relating to entire process of transmission of shares. A few common issues that we come across frequently are as follows:

Mixing up transfer of shares with transmission of shares: One of the widely- experienced problems is not to find out the difference between transfer and transmission of shares. The Companies Act clearly distinguishes transmission of shares from transfer of shares. While transfer of shares relates to a voluntary act of the shareholder, transmission is brought about by operation of law. Unlike transfer of shares, in case of transmission, shares are transferred without any consideration. The transmission takes place on the basis of will, succession or an agreement.

DEMAT OF SHARES

SEBI has by a notification made the physical transfer of shares ineligible w.e.f. 1st April, 2019. As such, companies are urging all holders of securities in physical form to dematerialize their shares. Dematerialization is the process by which a physical share is converted into digital format. An investor who wants to dematerialize the share certificate needs to open a Demat account with a DP (Depository Participant). The investor has to deface and surrender the certificates to convert them into electronic form which in turn is sent to his Demat account. Process can be verified electronically via confirmation request. Demat is safe, secure and convenient. It also reduces the risk of mutilation, loss and theft. IEPFholdings^tm helps investors to Demattheir shares by connecting them to reliable broking houses or DPs.

LOSS OF SHARE CERTIFICATES

A share certificate is a signed document on behalf of a company that serves as legal proof of ownership of the number of shares indicated. Being a paper document, it is prone to Mutilation/Theft/Lost in transit/Misuse. Therefore for an investor, it will be a great loss. IEPFholdings^tm team knows how to tackle these situations the prompt way.

RESOLVING CHANGE OF ADDRESS / SIGNATURE MISMATCH

IEPFholdings^tm has experts who efficiently deal with cases wherethe investor changed his residence and forgot to update the same in the company’s records, or in case of a signature mismatch. IEPFholdingstmexperts can help the investor to update and maintain the record and help to get back or recoverthe lost investment.

RECOVERY OF UNCLAIMED SHARES

As per Section 124 of the Companies Act, 2013, all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more shall be transferred by the organization in the name of Investor Education and Protection Fund (IEPF). These are the forgotten shares/investments which people tend to forget with time, usually in the case of senior citizens/change of address/lost shares/death of shareholder etc.Recovering the unclaimed shares is a very tedious, cumbersome and time taking activity. It is nearly impossible for a layman to do unexpected amount of communication and legal paperwork. IEPFholdingstm has experts who will help the investor to get the work done and manage all the required documents.

PROBATE

A probated will assumes significance in the sense that it establishes the legal character of the executor as the person responsible for implementing the contents of the will. The probate process is the first step towards resolving claims and distributing the amount of the deceased. There are also some cases in which a will/testament has not been executed and hence the amount becomes an unclaimed property lying idle. IEPFholdings^tm tracks down such investors and acknowledges them with the fact of existence of such wealth in their name and helps them recover the same by providing solid and full proof legal advisory.

LETTER OF ADMINISTRATION

Most people leave behind a will, however, there are some who don’t. In legal terms, this means that the person has died intestate. In such instances, a Letter of Administration needs to be granted by the competent court to an administrator. The administrator will then be the person responsible for administering the belongings of the deceased according to the succession laws of the land. IEPFholdings^tm can help the investor secure the letter of administration for this process. Usually, the amount is distributed equally among what are classified as Class-I heirs, or the deceased’s close relatives. The children should not be minors. If they are, then their share will be paid by their mother after they turn 18 years of age.

SUCCESSION CERTIFICATE

A will is a legal document which explicitly states how the person wishes to divide their property after death. If the deceased has died intestate (without writing a will), leaving behind debt and securities, then a document called “succession certificate” is needed for collecting debts and securities due to them.This certificate also indemnifies the debtors regarding all the payments made or the dealings done in good faith, from the holder of the certificate. This is precisely the reason many people concerned with these types of dealings ask for a succession certificate before beginning the proceedings for settling debts of the deceased with the claimant.A succession certificate is valid throughout India and IEPFholdingstmcarries out entire process of obtaining a succession certificate for the rightful successor from the stage of filing for certificate before the concerned court till the release of shares by the IEPF and the concerned company to the Demat Account of the successor.

RECOVERY OF MATURED INSURANCE

Around 15167 Crore is lying unclaimed in life insurance across India. The rise is largely because of dependents not being aware of existence of a life insurance policy.This is mainly due to following reasons:

• Loss of policy documents
• Death of policyholder
• Closure of bank account
• No claim even after maturity
• Premiums remaining unpaid

IEPFholdings^tm insurance advisory team helps in recovery of following types of claims of life insurance

• Death Claims
• Survival benefits
• Maturity claim
• Premium refunds

We at www.iepf.info are receiving a lot of queries from investors from different parts of India to know how someone can transmit shares from the name of a deceased person to legal Heir, Nominee, or surviving joint holder, etc.

Hence IEPFholdings^tm have assembled a team of experts from relative fields having relevant experience and knowledge for helping millions of investors to recover their lost wealth created by their ancestors in most cases through their hard earned savings. The difference between Transfer of Shares and Transmission of Shares is well explained herein below.

Transfer of Shares: In the stock market, we daily buy and sell shares either on Listed Exchanges i.e. NSE or BSE or do Off-Market Transaction in Unlisted Market. So this process of selling shares from “Investor A” to “Investor B” is basically called as Transfer of Shares.

Transmission of Shares: The word ‘transmission’ means devolution of title to shares otherwise than by transfer, for example, devolution by death, succession, inheritance, bankruptcy, marriage, etc.

As we have understood the basic difference between the two terms:

1. Transmission
2. Transfer

Different scenarios for the transmission of shares as handled by IEPFholdings^tm:

Case 1: Transmission of Security in case of Joint holding + No Will+ No Nominee Available

Case 2: Transmission of Security in case of Single holding + No Will+ No Nominee Available

Case 3: Transmission of Security in case of Single holding or Joint Holders + Nominee available

Note:

According to new SEBI guidelines, no transaction for the transfer of securities of a listed company, at a stock exchange or off-market transactions (Unlisted Shares) between buyers and sellers, can happen in physical certificate form. The shares need to be first converted into Demat form then only they can be sold in the market. So, all shares held in physical after 01.04.2019 have become illiquid except for transmission and transposition. Transmission (transfer to heirs in case of death of the owner) would be possible in case of inheritance but the new owners will have to dematerialize the shares if they wish to sell or further.

Therefore, in the case of Transmission of shares, the ownership of the shares can be changed without the Demat account but to sell those shares in the market after getting ownership they need to be first converted in Demat form.

So if any of you is facing any issue regarding selling shares of deceased person, change of nomination, sign mismatch issue while conversion of shares or any legal advice on different case scenarios as discussed above can contact our team of experts by dropping an email at advisor@iepf.info or can WhatsApp at +91-7046577885 to IEPFholdings^tm team. Our team will take you through the detailed process of such transmission without any hassles and shall be happy to oblige.