Transfer of shares unclaimed for seven consecutive years to the IEPF
The duty to move shares whose dividend has gone unpaid or unclaimed for seven consecutive years into an IEPF suspense account, with the advance intimation and newspaper notice that go before it.
Credit of the shares
Counted from the shares becoming due to be transferred to the Fund, being shares on which dividend has not been paid or claimed for seven consecutive years
- MCA
- MCA event filings
- Not specified
- 2026-09-01
The shares are credited within 30 days of becoming due to be transferred, and the statement in Form IEPF-4 goes to the Authority on the same clock. The transfer duty is section 124(6), not section 125: section 125 constitutes the Fund and lists what is credited to it. Three months before the due date the company must also intimate the shareholder and publish a newspaper notice.
Two things in the published rule text are out of date and matter here. First, the share-transfer duty is section 124(6); it is widely cited as section 125, which is the section that constitutes the Fund. Second, live rule 6(1) routes the shares to an IEPF suspense account opened in the company's own name with a depository participant identified by the Authority, and the older text describing a transfer into the Authority's demat account is superseded.
Deadlines counted from an event
Within 30 days of the shares becoming due to be transferred, under section 124(6) and rule 6(1) of the IEPF (AATR) Rules, credited through corporate action to an IEPF suspense account.
Within 30 days of the corporate action taken under rule 6(3)(c), send the Authority a statement in Form IEPF-4 with a copy of the public notice published under rule 6(3)(a).
Three months before the due date for transfer, inform the shareholder at his latest available address and simultaneously publish a notice in a leading English and regional-language newspaper naming the company's website where the shareholders and their folio or DP ID numbers are listed, under rule 6(3)(a).
The rule
Within 30 days of the shares becoming due to be transferred, under section 124(6) and rule 6(1) of the IEPF (AATR) Rules, credited through corporate action to an IEPF suspense account.
Within 30 days of the corporate action taken under rule 6(3)(c), send the Authority a statement in Form IEPF-4 with a copy of the public notice published under rule 6(3)(a).
Three months before the due date for transfer, inform the shareholder at his latest available address and simultaneously publish a notice in a leading English and regional-language newspaper naming the company's website where the shareholders and their folio or DP ID numbers are listed, under rule 6(3)(a).
Who must comply
- Every company holding shares on which dividend has not been paid or claimed for seven consecutive years or more
- The proviso to rule 6(1) and the Explanation to section 124(6) keep the shares out of the transfer where the beneficial owner encashed any dividend warrant, or any dividend was credited to his bank account, during the last seven years, even if some warrants went uncashed
- Rule 6(3)(b) stops the transfer where a court, tribunal or statutory authority has restrained transfer of the shares or payment of dividend, or where the shares are pledged or hypothecated under the Depositories Act, 1996, and requires the details to be furnished to the Authority in Form IEPF-4 instead within thirty days of the end of the financial year
Statutory basis
Before you file
- Identify the shares on which dividend has gone unpaid or unclaimed for seven consecutive years.
- Check each holder against the carve-out: exclude the shares if he encashed any dividend warrant or received any dividend in his bank account during the last seven years.
- Check for any court, tribunal or statutory restraint on transfer, and for any pledge or hypothecation.
- Inform each shareholder at his latest available address three months before the due date.
- Publish the newspaper notice in English and in the regional language, naming the company website that lists the shareholders and their folio or DP ID numbers.
- Get the Board's authorisation for the company secretary or another person to sign the transfer documents.
- Issue a new share certificate for shares held in physical form, marked as issued in lieu of the original for the purpose of transfer to the IEPF.
How to file
- Inform the depository by corporate action of the accounts to be transferred.
- Have the depository effect the transfer into the IEPF suspense account.
- Complete the credit within 30 days of the shares becoming due to be transferred.
- Log in to the MCA21 V3 portal as a business user.
- Open Form IEPF-4.
- Enter the details of the shares transferred and of the holders.
- Attach a copy of the public notice published under rule 6(3)(a).
- Sign the form with the digital signature of an authorised signatory.
- Submit the form within 30 days of the corporate action.
- Preserve copies of the transfer records.
If you miss it
Section 124(7) sets one penalty for any failure under section 124: ₹1 lakh on the company plus ₹500 for each day the failure continues, capped at ₹10 lakh, and ₹25,000 on every officer in default plus ₹100 a day, capped at ₹2 lakh.
- The proviso to section 124(6) leaves the claimant entitled to claim the transfer of the shares back from the IEPF, so a wrongly transferred holding becomes a claim the company has to verify rather than a closed matter
- The money on those shares runs on the parallel section 124(5) clock, so the two transfers usually fall due together
Recent changes affecting this
Common questions
Is this a section 125 duty?
No. Section 124(6) is the transfer duty. Section 125 constitutes the Investor Education and Protection Fund and lists what is credited to it.
What if the shareholder cashed one dividend in seven years?
Then the shares are not transferred. The proviso to rule 6(1) and the Explanation to section 124(6) both say that encashing any dividend warrant, or receiving any dividend in the bank account, during the seven years takes the shares out, even if other warrants went uncashed.
Where do the shares actually go?
To an IEPF suspense account opened in the company's own name with a depository participant identified by the Authority. Text describing a transfer straight into the Authority's demat account is the superseded version of rule 6(1).