Recovery of Shares

Unclaimed Dividend and Shares: Reclaiming Your Rights

Investors often need to pay more attention to Unclaimed dividend and shares, leading to a loss of their rightful ownership and financial benefits. In this blog, we will delve into the concept of unclaimed dividend and shares, explore the reasons behind their existence, and provide guidance on reclaiming what is rightfully yours. By understanding the process of claiming (IEPF) unclaimed dividends and shares, you can ensure that you protect your financial interests and make the most of your investments.

Understanding Unclaimed Dividend and Shares:

Unclaimed dividends represent the amount of money a company declares as dividends that shareholders have yet to claim within a specified timeframe. There are several reasons why dividends still need to be claimed, including a change of address, misplaced dividend checks, or simple oversight. According to the Companies Act 2013, companies must transfer unclaimed dividends to a designated bank account, the Unpaid Dividend Account. This account is maintained for seven years from when the dividend was first due for payment. After this period, if the dividend remains unclaimed, the company can transfer the amount to the Investor Education and Protection Fund (IEPF)¹, established by the government.

To claim unclaimed dividends, shareholders must submit a claim application to the company, accompanied by relevant documents such as identification proof, address proof, and a copy of the dividend warrant. The company will then verify the claim and release the unclaimed dividend amount to the shareholder if the claim is deemed valid. Shareholders must keep their address and contact details up-to-date with the company to ensure smooth communication regarding dividends and other corporate actions. Failing to claim the dividend within the specified time limit may result in the forfeiture of the right to claim, with the amount being transferred

On the other hand, the dematerialisation (Demat) of shares involves converting physical share certificates into an electronic format, enabling investors to hold and trade shares electronically. This process (IEPF) requires opening a Demat account with a depository participant, who securely holds the shares on behalf of the investor. Dematerialisation eliminates the need for physical share transfers, streamlines transactions, reduces paperwork, and offers convenience and safety to investors. While physical share certificates, known as paper shares, were once prevalent, many companies now issue electronic statements to shareholders or hold shares in dematerialised form through a depository.

How to Reclaim Unclaimed Dividend with MUDS:

To claim unclaimed dividends from a company, follow these steps:

• Check the Company’s Unclaimed Dividend Register: Start by checking the company’s unclaimed dividend register, which contains details of all unclaimed dividends. This register can be accessed through the company’s website or by contacting their investor relations department.

•   Verify the Unclaimed Dividend Amount: Review the unclaimed dividend amount mentioned in the register and compare it with your records to ensure that you are entitled to claim the dividend.

•   Submit the Claim Application: If you can claim the unclaimed dividend, submit a claim application to the company. Include your name, address, PAN number, folio number, and the specific amount you claim. Attach copies of your identification and address proofs along with the application.

• Meet the Prescribed Time Limit: Make sure to submit the claim application within the specified time limit. The Companies Act of 2013 allows shareholders to claim unclaimed dividends within seven years from the date they were due for payment. You must meet this deadline to claim the dividend to avoid losing your right to claim the dividend.

•   Await Verification: Once you submit the claim application, the company will verify its authenticity. This verification process (IEPF) may require additional documents or information to support your claim. Be patient during this stage.

• Receive the Unclaimed Dividend Amount: If your claim is successfully verified, the company will release the unclaimed dividend amount to you. The payment can be made via a check, direct bank transfer, or any other mode specified by the company.

Additional Tips for Reclaiming Unclaimed Dividends:

To facilitate a smooth claim process, consider the following tips:

• Keep your records up-to-date: Ensure that your address, PAN number, and other relevant details are always updated with the company. This will guarantee that you receive all dividends and necessary communications.

• Verify your bank account details: Double-check that your bank account details are accurate and current if the dividend amount is paid through direct bank transfer.

• Stay informed about claim deadlines: Keep track of the last date for claiming the dividend, as specified in the company’s unclaimed dividend register. Submit your claim application before the deadline to ensure your right to the unclaimed dividend is maintained.

• Seek professional assistance if needed: If you encounter any challenges or difficulties in claiming the unclaimed dividend, consider seeking guidance from a lawyer or a chartered accountant specialising in financial matters.

Conclusion:

Reclaiming unclaimed dividends and shares is straightforward if you follow the necessary steps. By regularly checking the unclaimed dividend register, submitting claim applications within the designated timeframe, and keeping your records up-to-date, you can effectively ensure that you receive the dividends and exercise your ownership rights over shares. Remember to stay informed and take proactive measures to reclaim what is rightfully yours, safeguarding your financial interests.

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Read Our Article: Detailed Analysis of the Recovery of Shares in the International Market

1. https://www.iepf.gov.in/content/iepf/global/master/Home/Home.html