Know about the amounts transferred to IEPF

 The IEPF or the Investor Education and Protection Fund are used for promoting awareness and protecting the interests of the investors. So, let’s talk about what are IEPF and IEPF recovery and the amounts that are transferred to IEPF.

What is IEPF?

Before knowing about IEPF recovery, you should know about what a company is. To explain legally, a company is a legal body that is able to own a particular amount of property and hence can sue or be sued under its own name. Though it has no specific meaning legally, to say generally, it is a group of people who work professionally and try to achieve a particular result.

The IEPF or Investor Education and Protection Fund was a fund that was set up initially to pool in all the dividends, shared application money or interests, matured deposits debentures, etc., that have remained unclaimed for seven years.  All the money that is collected from those sources needs to be transferred to the fund known as IEPF. 

The investors, who are planning to ask for a refund of their rewards that were unclaimed, can now easily claim those from this IEPF or Investor Education and Protection Fund. This procedure of claiming dividends and shares from the IEPF in a problem freeway is also known as IEPF recovery.

What are the objectives of IEPF?

Now, you may wonder, what can be the objectives of building IEPF, so here are several points to enlighten you.

• Educating the investors so they can easily make some well-informed decisions.

• Enlightening the investors about how the market actually operates.

• Helping the investors to realize the important laws and their rights related to investments.

• Helping the investors to know and understand the dynamism of the markets.

• Promoting surveys and research to increase the knowledge of the investors.

The amounts transferred to IEPF

Now let’s discuss the amounts transferred to IEPF.

The amounts stated below will be a part of IEPF, if they are not claimed for seven years from the declaration date:

• Shares for which there is no claim of dividends for a span of seven years consecutively.

• The amounts that are in the dividend accounts of the companies that are not paid.

• The matured deposits with the organizations.

• The application money that was received by the companies for allotment of the security is due for a refund.

• The matured debentures of the companies.

• The interests or other incomes, if any, received from the investments that are made from the fund.

How can an IEPF be created under the company law?

Here are the steps about how you can create an IEPF under the company law.

Step 1: the declaration of the dividend

Step 2: paying the dividend to the shareholders

Step 3: Transferring to the dividend account that is unpaid.

Step 4: The calculation of due date for transferring to IEPF

Step 5: Transferring the dividend that is unclaimed and the underlying shares.

Step 6: The end of the financial year.

Therefore, the IEPF and IEPF recovery is a very important factor for running a company, because this is set up to calculate your all matured deposits, dividends, debentures, and many more for seven years and educate the investors to run their business successfully.