Claim Shares from IEPF: Transmission of Shares under Company Law & Legal Heir Certificate Explained

 Unclaimed shares and dividends are more common than most people realize. Many investors or their families lose track of investments due to relocation, change in address, lack of nomination, or the unfortunate demise of the shareholder. Over time, these unclaimed shares are transferred to the Investor Education and Protection Fund (IEPF). If you are a legal heir or claimant, understanding how to claim shares from IEPF, the transmission of shares in company law, and the importance of a legal heir certificate is essential.

This guide breaks down the entire process in simple terms, without legal jargon overload, so you know exactly what to do and how to do it.

Understanding IEPF and Unclaimed Shares

The Investor Education and Protection Fund (IEPF) was established by the Government of India under the Companies Act to safeguard the interests of investors. When dividends or shares remain unclaimed for seven consecutive years, companies are legally required to transfer them to the IEPF.

Unclaimed assets transferred to IEPF may include:

• Equity shares

• Bonus shares

• Shares arising out of mergers or amalgamations

• Unpaid or unclaimed dividends

While the transfer may sound final, the good news is that shareholders or their legal heirs can still claim shares from IEPF by following the prescribed procedure.

What Does Claim Shares from IEPF Mean?

To claim shares from IEPF means requesting the government to transfer back the shares and any associated benefits to the rightful owner or legal heir. This is done by filing an application with the IEPF Authority through a structured online and offline process.

The claim can be made by:

• Original shareholders

• Legal heirs of deceased shareholders

• Successors or nominees

However, the process differs slightly depending on whether the shareholder is alive or deceased. In case of death, transmission of shares in company law becomes a critical concept.

Transmission of Shares in Company Law Explained

Transmission of shares refers to the transfer of ownership of shares by operation of law. Unlike transfer of shares, which is a voluntary act between buyer and seller, transmission occurs due to events such as:

• Death of a shareholder

• Insolvency

• Lunacy

Under company law, when a shareholder dies, their shares do not automatically pass to the legal heirs. The heirs must formally apply for transmission of shares by submitting legal documents to the company.

Transmission of shares in company law is governed by:

• Companies Act, 2013

• Articles of Association (AOA) of the company

• SEBI regulations (for listed companies)

Without completing transmission, legal heirs cannot sell, transfer, or claim benefits related to the shares.

Role of Legal Heir Certificate in Share Claims

A legal heir certificate is one of the most important documents required for the transmission of shares and to claim shares from IEPF. It serves as official proof that the claimant is a rightful heir of the deceased shareholder.

What is a Legal Heir Certificate?

A legal heir certificate is issued by a competent government authority, such as:

• Tehsildar

• Revenue officer

• District court (in some cases)

It lists all surviving legal heirs of the deceased person.

Why Is It Important?

When claiming shares from IEPF or applying for transmission of shares in company law, the legal heir certificate helps:

• Establish the relationship between the deceased and the claimant

• Avoid disputes among heirs

• Enable companies and authorities to release shares lawfully

In many cases, companies may also ask for a succession certificate or probate of will, depending on the value of shares and internal policies.

Step-by-Step Process to Claim Shares from IEPF

Claiming shares from IEPF involves coordination between the claimant, the company, and the IEPF Authority. Below is a simplified step-by-step process.

Step 1: Identify the Shares Transferred to IEPF

Start by checking:

• Company annual reports

• IEPF website search facility

• Old dividend warrants or share certificates

Confirm the number of shares and the year they were transferred to IEPF.

Step 2: File Form IEPF-5 Online

Form IEPF-5 is the official application form available on the Ministry of Corporate Affairs (MCA) website.

Details required include:

• Personal details of claimant

• Details of shares and company

• Bank and demat account information

After submission, an acknowledgment is generated.

Step 3: Submit Documents to the Company

After filing Form IEPF-5, you must send physical documents to the company’s Nodal Officer.

Key documents include:

• Copy of Form IEPF-5 acknowledgment

• Original share certificates (if available)

• Legal heir certificate

• Death certificate of the shareholder

• Indemnity bond and affidavit

• Cancelled cheque

• Client Master List (for demat account)

Step 4: Company Verification

The company verifies the documents and prepares a verification report. This report is sent to the IEPF Authority within the prescribed timeline.

Step 5: Approval by IEPF Authority

Once the IEPF Authority is satisfied, it approves the claim and transfers the shares to the claimant’s demat account.

Transmission of Shares Before Claiming from IEPF

In many cases, transmission of shares must be completed before or along with the IEPF claim.

If the shares were transferred to IEPF in the name of a deceased shareholder, the legal heirs must:

• Apply for transmission with the company

• Submit a legal heir certificate or succession certificate

• Get the shares transmitted in their name (or jointly)

Only after successful transmission can the heirs smoothly claim shares from IEPF.

Common Challenges Faced by Legal Heirs

While the law provides a clear path, practical challenges often arise.

Missing Documents

Many families struggle to locate:

• Old share certificates

• Dividend warrants

• Folio numbers

Multiple Legal Heirs

When there are multiple heirs, consent letters or no-objection certificates (NOCs) are usually required.

Delay in Legal Heir Certificate

Obtaining a legal heir certificate can take time, especially if records are incomplete.

Despite these challenges, patience and proper documentation usually lead to successful resolution.

Practical Tips for a Smooth IEPF Claim

• Always ensure the demat account is active and correctly linked

• Double-check names and spellings across documents

• Keep scanned and physical copies of all submissions

• Communicate regularly with the company’s IEPF Nodal Officer

• Seek professional assistance if the claim value is high

These steps can significantly reduce delays and rejections.

Conclusion

Claiming unclaimed investments may seem intimidating, but with the right knowledge, it becomes manageable. Understanding how to claim shares from IEPF, the legal framework surrounding transmission of shares in company law, and the importance of a legal heir certificate empowers investors and families to recover what is rightfully theirs.

If you are a legal heir, don’t assume old investments are lost forever. With systematic documentation and persistence, shares and dividends lying with IEPF can be successfully reclaimed, preserving both financial value and family legacy.

Frequently Asked Questions (FAQs)

1. How long does it take to claim shares from IEPF?

The process typically takes 3 to 6 months, depending on document verification and response time from the company and IEPF Authority.

2. Is a legal heir certificate mandatory to claim shares from IEPF?

Yes, in case of a deceased shareholder, a legal heir certificate or succession certificate is generally mandatory for transmission of shares.

3. Can multiple legal heirs jointly claim shares from IEPF?

Yes, multiple heirs can jointly claim shares, or one heir can claim with consent and NOCs from other heirs.

4. What is the difference between transmission of shares and transfer of shares?

Transmission occurs by operation of law (death, insolvency), while transfer is a voluntary act between two parties.

5. Can I claim dividends along with shares from IEPF?

Yes, along with shares, any accrued dividends transferred to IEPF can also be claimed through the same process.