Overview

In earlier times, investing in shares involved issuance of physical share certificates. Investors acquired shares or debentures in companies in tangible paper form. However, managing these paper certificates was challenging as they were prone to damage, loss, or destruction. Factors like relocation, wear and tear, or simple forgetfulness led to difficulties in securely maintaining these certificates. The reasons for unclaimed shares in physical form could include:

#1. Misplaced Shares

#2. Damaged Shares

#3. Torn Shares

#4. Forgotten Shares

#5. Deceased Original Shareholder

#6. Unclaimed Shares

So, if you also want to claim these unclaimed shares or want to transfer the shares in your account after the death of the original shareholder, you need to file an application to IEPF.

IEPF is the government organisation that is in charge of share recovery using a well-defined procedure. The Authority is entrusted with the responsibility of administration of the Investor Education Protection Fund (IEPF), making refunds of shares, unclaimed dividends, matured deposits/debentures etc. to investors and to promote awareness among investors.

What is IEPF?

Investor Education and Protection Fund (IEPF) has been established under Section 205C of the Companies Act, 1956 by way of Companies (Amendment) Act, 1999 for promotion of investors’ awareness and protection of the interests of investors. It was also provided in the Amendment Act that no claims shall lie against the Fund or the Company in respect of individual amounts which were unclaimed and unpaid for a period of seven years from the dates that they first became due for payments and no payment shall be made in respect of any such claims.

What is the Role of IEPF for unclaimed shares?

If dividends or shares are left unclaimed or if there's a partial payment for more than a month, they are transferred to the Investor Education and Protection Fund (IEPF) within a week. The IEPF then takes charge of recovering these unclaimed assets through a set process. Common reasons for share recovery by the IEPF include lost, damaged, or unusable certificates, outdated records, improperly executed transfers, or even the passing of the shareholder.

How can I recover my shares?

To recover your shares, you need to follow the application process as set by the IEPF. You also need to send physical documents to the company. Afterwards, the company will file its verification report based on the documents sent. Once the claim gets approved from the Company's side on IEPF Portal, the shares are transferred to the legal heir's demat account.

How can I recover Parents & Grandparents lost shares?

CDSL/NSDL provide consolidated statements encompassing demat shares. Thus, you can try contacting them with your parents' and grandparents' details (assuming you don't have the Demat account numbers). However, If you have the certificates with company names and folio numbers, you can directly contact the company (if operational) or seek help for delisted companies. It would be best to seek the advice of a professional to recover parents and grandparents shares as per your own unique scenario.

How to find my lost shares?

The Investor Education and Protection Fund Authority (IEPF) website offers a user-friendly search tool for unclaimed shares and dividends. You need to simply enter the shareholder's details and the system will help you locate any lost shares. Search here: IEPF Website

Document Requirement to get Recovery of Shares

#1. Copy of acknowledgement (with SRN) for online e-Form IEPF-5 submission

#2. Indemnity Bond (original) signed by the claimant

#3. Advance Stamped Receipt (original) with revenue stamp, signed by claimant and witnesses

#4. Original matured deposit/debenture/share certificate (physical form) OR copy of transaction statement (Demat form)

#5. Self-attested copy of Aadhaar Card

#6. Proof of entitlement (e.g., share certificate, interest warrant application number)

#7. Cancelled cheque leaf

#8. Copy of Passport, OCI, or PIO card (for foreigners and NRIs)

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Who can apply for Recovery of Shares in India?

# Owner of the shares

# Son/ Daughter of Old Parents / Grandparents

# Inheriting Shares from someone who passed away (legal heir),

Above individuals can apply for Recovery of shares in India.

Timeline and Deadline to apply for Recovery of Shares

#1. After 7 years: If your shares remain unclaimed for seven years, they will be transferred to the Investor Education and Protection Fund (IEPF). You can easily recover shares during this stage.

#2. Time Limit: Additionally, You have 25 years to claim your unclaimed money and stocks from the IEPF. However, you should not wait too long to avoid any problems later.

#3. After 25 Years: If you miss the 25-year deadline, you can still try to claim your money and stocks, but it might be harder and you might need extra documents.

Refund Process of IEPF Authority

Once the company verifies your claim (through a verification report), the IEPF Authority will make a decision on your application within 60 days.

#1. If you own the shares: The IEPF will get approval from the authorities and then issue a "refund sanction order" for your shares. These shares will be credited directly to your Demat account.

#2. If your refund is due: The IEPF will confirm your claim and then send a payment request to their accounts department. The money will then be credited to your account.

Common Mistakes to avoid while applying for Recovery of Shares

#1. Missing Documents: Ensure you submit all required documentation, like ID proof and residence verification, promptly to avoid delays.

#2. Information Discrepancies: Verify consistency between the claim form and attached documents to prevent processing issues.

#3. Incorrect Submission: Send your claim to the designated Nodal Officer or branch to maintain efficiency. Do not send to the wrong address.

#4. Notary or Attestation: Follow proper procedures for document authentication to prevent complications.

#5. Ignoring Deadlines: Stay mindful of submission deadlines to avoid unnecessary setbacks.

#6. Truthfulness Matters: Provide accurate information on the claim form to prevent rejection.

#7. Ownership Proof: Keep necessary documents, such as nominee details or legal heir certificates, readily available to avoid verification delays.

Government fee to apply for Shares Recovery through Form IEPF-5

The government fee to apply for shares recovery through from IEPF-5 is nil.

Why choose E-StartupIndia for Recovery of Shares?

Effectively recovering unclaimed shares is a time-consuming and difficult process. E-StartupIndia simplifies this process for shareholders like you. We provide you necessary assistance in application submission and document preparation for recovery of shares. We have teams of professionals such as CA, CS, Lawyers, etc. with a deep understanding of the regulations surrounding the IEPF and shared recovery. At E-StartupIndia, we prioritise client satisfaction. Our commitment is to provide you with the highest level of service and support, ensuring a positive outcome for your share recovery. Call us right now!