0

Navigating the legal procedures while claiming inherited shares – today news

Share


At the time of my father’s demise, I was unaware of the treasure he left behind. From 1970 to 1978, he purchased 420 shares of ITC Ltd, which became 173,880 shares over the last 35-40 years because of corporate actions such as bonuses and share splits. In 2017, these shares were valued at around 6.5 crore, which are at present worth over 8 crore. What am I required to do claim the shares?

—Name withheld on request

The process begins with the need for a transmission of shares, which occurs when a shareholder—in this case, your deceased father—passes away. Given that the value of the shares exceeds the threshold of 5 lakh, you will have to acquire a succession certificate from the district court where your father’s death occurred. If your father left a will, the requirement shifts to obtaining a probate of the will. It’s worth noting that securing either a succession certificate or a probate is a lengthy legal procedure, and engaging a competent lawyer is advisable.

In addition, it appears you are missing some physical shares due to corporate actions or other reasons. You will need to get duplicate shares issued by the company, which will require submission of various documents, including a police report for the loss of shares, affidavits and indemnities.

Once these are done, the company will scrutinize the documents submitted. After it verifies that all is in order, it will issue an entitlement letter in your favour, which will enable you to claim the shares from the Investor Education and Protection Fund (IPEF) Authority.

According to IEPF rules, if dividends remain unclaimed for 7 years or more, the custodial ownership of shares and dividends are transferred to the IEPF Authority, which would have happened in your case.

Using the entitlement letter, you will be need to file an online IEPF claim, which will then be reviewed by the company. Once that is done, the IEPF Authority will conduct further verification of the documents. If everything is in order, the IEPF Authority will approve the claim and proceed to transfer the shares to your demat account. Any outstanding dividends will also be transferred to your bank account over time.

Given that this process involves multiple authorities and necessitates approvals at various stages, it is important to recognize that it may be time-consuming. Nevertheless, as a legitimate claimant, you can rest assured that the company and the IEPF Authority will ensure the rightful transfer of the shares and dividends to you following the completion of due processes.

Vikash Kumar Jain is a co-founder at Share Samadhan.

Here’s your comprehensive 3-minute summary of all the things Finance Minister Nirmala Sitharaman said in her Budget speech: Click to download!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Check all the latest action on Budget 2024 here.
Download The Mint News App to get Daily Market Updates.

More
Less

Published: 07 Feb 2024, 10:37 PM IST



Source Link