In case you are wondering what IEPF is, here’s all you need to know and then some. Read on.
In case you’ve heard about IEPF but don’t know what it actually means, you’ve come to the right place. We can help you understand it better. First of all, IEPF stands for Investor Education and Protection Fund. Let’s cover all aspects of this fund one by one.
What Is IEPF?
As mentioned before, IEPF stands for Investor Education and Protection Fund. In simpler words, it’s a fund set up under the Ministry of Corporate Affairs to help promote investor awareness and protection of investor interests.
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How Is It Funded?
In order to fund the IEPF, unclaimed dividend, refunded application money, matured company deposits and debentures, as well as the interest on them, is used, provided it is not claimed within seven years. To decide what proportion of the money gets utilised where the IEPF is monitored by a trust.
The trust has been given the authority under subsection 4 to spend money out of the IEPF. The Registrar of Companies furnishes receipts and also reconciles them with the amount remitted and collected from the concerned account officer. The MCA (Ministry of Corporate Affairs) maintains a consolidated abstract of all these receipts.
What Are The Main Functions Of The IEPF Trust?
- To plan out different activities for Investor Education and Protection in the form of seminars, symposiums and proposals for registration of voluntary association or institution engaged in IEPF projects.
- To plan out proposals for registration of voluntary associations, institutions or other organisations involved in IEPF activities.
- Co-ordination with institutions involved in investor education and awareness activities.
- To plan out proposals for projects for IEPF including research activities and proposals for financing such projects.
- Appoint one or more subcommittees to ensure smooth functioning of the fund.
- To furnish reports for the central government after every six months.
Is It Possible To Recover Money Credited To The IEPF?
No. Investors can’t recover the unclaimed money but they can view the amount credited to the fund through the IEPF website. However, it can be possible to claim unpaid amount from the company before it gets credited to the IEPF.
What Are The Guidelines To Fund Research Proposals?
In order to fund research proposals, following are the set of guidelines issued:
- A 2000-word outline of the research program that is being proposed indicating why the same is the right fit according to the goals of IEPF.
- A detailed resume of all the researchers who are going to be associated with the project.
- Three best recently published/unpublished papers of those researchers.
- Letters of commitment by researchers promising that they will put in at least 50% of their time for the proposed project from the stated starting date to the stated ending date.
What’s The Procedure For Financial Assistance?
In order to get financial assistance, the following procedure needs to be followed:
- Entities that fulfil the criteria/guidelines for the purpose of financial assistance from IEPF may apply to the IEPF for such assistance in Form 4.
- The feasibility of the project, quantum of financial assistance, the genuineness of the organisation, etc. is then evaluated by the subcommittee of IEPF in its meetings held at regular intervals.
- After the subcommittee approves the proposal, IEPF issues the financial sanction with the approval of the Internal Finance Wing of the Ministry of Corporate Affairs.
- The amount is then released to the organisation, but only after it submits a pre-defined bond and a pre-receipt to IEPF.
- After the project is completed, the organisation is required to submit the funds’ utilisation certificate and copies of the bills etc. to IEPF for scrutiny.
How To Transfer The Unpaid Amount To The IEPF
The unpaid amount can be transferred to the IEPF under Section 205C following this procedure:
- Login to the MCA portal.
- Select the option “Pay miscellaneous fee”.
- Select the option “Pay fee for Investor Education and Protection Fund”.
- Fill in the CIN number, company name, details of payment and amount and make the payment.
- After making the payment, file the form 1 statement of amounts credited to IEPF through MCA portal.
What Type Of Funds Are Moved To IEPF?
In case you’re wondering what kind of funds are moved to IEPF, here’s a list:
- Application money obtained due to a refund
- Debentures (plus their interest) of companies
- Proceeds from matured company deposits
How To Redeem The Unclaimed Amount?
The IEPF website usually has all the details of unclaimed amounts. To make a claim, you can use IEPF-5 form. Don’t worry! You don’t have to go looking for everywhere. Here’s all you need to do:
- Simply download the form from the IEPF website.
- Fill in all the relevant details like your name, your company’s name, Aadhaar details, amount to be claimed, your bank account number and demat account details.
- Once you upload the form, it gets processed by MCA21 and they also generate an SRN. After you click the ‘pay’ option, an acknowledgement is generated. The best part? You don’t have to pay for making a claim.
- Now that you have a copy of the claim with your signature, it has to be submitted along with the acknowledgement and the indemnity bond at the Nodal Officer’s office (IEPF) of the company.
- Don’t forget to mark the documents as ‘claim for refund from the IEPF authority’.
That’s about it! Simple, isn’t it?
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