According to general norms, stock dividends get deposited to the bank account that is linked to the Demat account of the owner of the stocks. When the company fails to distribute dividends to the shareholders, there arises a situation of Unclaimed dividends and shares. A shareholder is required to claim dividends and shares within a limited period of time which is actually 30 days from the date of the declaration of dividend. Unclaimed dividends and shares remain unclaimed and get accumulated with the company. Here, you will get to know what to do if you inherit unclaimed dividends and shares. Request Letter If you inherit unclaimed dividends and shares then you will first have to begin by sending a request letter. This letter will be addressed to the company’s registrar and also to the transfer agent.
There are a few things to consider when making the request letter. The request letter must contain the following things:
The folio number of physical shares.
It must have a depository participant ID.
The respective client ID.
A declaration about the time period for which the dividend was not claimed and received.
Documents With the request letter, you must provide the outdated dividend warrant. The client master list must be provided and it should reflect the current shareholder’s details of shares held in the Demat account. Along with this, an indemnity bond in the format must be prescribed by the company. Process After submitting all the documents, the RTA scrutinizes and verifies the request letter and the documents. After complete verification, the RTA will send forward a demand draft. It will contain the relevant amount of outstanding balance accounting for the unpaid dividends. This will be in accordance to the accounts of the organization, and also if the documents are agreeable. Claim Period After 7 years, such amounts are transferred to the IEPF, which is the Investor Education and Protection Fund set up by the Ministry of Corporate Affairs. After the transfer of the amount, the amount cannot be claimed.
After a company achieves success, it will consequently lose the need to return or invest its revenue into the business. Naturally, the funds can be used to pay the stockholders the dividend that might be due. A shareholder who inherits any unclaimed dividends and shares, will have to claim them not just because it will be some extra money, but also for the fact that they would have to disclose their additional income accurately to tax authorities. Financial Advisor In case the stock certificate is missing or in situations where you cannot get a hold of any other essential information about the company that has issued the shares, then you can seek a consultation with a reliable or your personal financial advisor. It may take a long time but the new company should be able to process your claim and mail the dividend check to you.
Federal Deposit Insurance Corporation If you get no assistance in finding the right information about the issuing company, you can go to the Federal Deposit Insurance Corporation. It may delay the dividends that are not paid until and unless the rightful owners make a claim for the shares or dividends in question. You can also visit its website and it is very helpful. The online filing process is pretty simple and you get an FDIC reference number after you complete filing. Complete and Download the FDIC Claimant Form The consequent steps are pretty simple. All you need to do is simply download and accurately fill up the FDIC claimant form. You will need to put in the reference number you got after online filing. The FDIC complaint form will also have to be notarized until you are standing before the notary public. When there are any questions about the filing, you can expect communication from the end of FDIC within 30 days.
An organization has a lot of incentives to offer higher dividends sometimes at the cost of other interests of the company. Therefore, it is very common for a company to provide inflated dividends to bring investors. Then, it gradually reduces them when the purpose is served. Final Thoughts
The shareholder needs to get any changes registered if they want to change their address or bank details. If you inherit unclaimed dividends and shares, then you must follow the above-mentioned way. This can really helo to get out of the matter. The company needs to hammer shareholders to claim their unpaid dividends and shares before transferring the funds to Investor Education and Protection Fund.
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