Section 125 of the Companies Act, 2013
Section 125 of the Companies Act, 2013 deals with the “Investor Education and Protection Fund (IEPF)” – a fund established to promote investor awareness and refund unclaimed dividends and other amounts to rightful owners.
📜 Section 125 – Investor Education and Protection Fund (IEPF)
(1) Establishment of the Fund:
The Central Government shall establish a Fund called the Investor Education and Protection Fund (IEPF).
💰 (2) Amounts credited to the IEPF:
The following amounts are credited to the IEPF:
Unclaimed dividend (after 7 years)
Matured deposits with companies (not claimed within 7 years)
Matured debentures (not claimed within 7 years)
Application money due for refund (not claimed within 7 years)
Sale proceeds of fractional shares (from bonus/split etc.)
Redemption amount of preference shares (unclaimed)
Any interest or income earned on these amounts
Grants and donations by the Central Government, State Governments, companies, or others.
🧾 (3) Administration of the Fund:
The Central Government shall constitute an authority to:
Administer the Fund
Spend money for:
Promoting investor education and awareness
Refund of unclaimed dividends and other eligible amounts to investors
🧍♂️ (4) Refund Claim:
Any person whose amounts were credited to the IEPF can claim a refund by applying to the authority in the prescribed form and manner.
📌 (5) Utilization of the Fund:
The Fund shall be used for:
Refunds of unpaid amounts to rightful claimants
Promotion of investor awareness
Distribution of any disgorged amounts (as per SEBI orders)
Reimbursement of legal expenses incurred by investors
Other purposes incidental to the above
✅ Summary:
| Aspect | Details |
|---|---|
| Fund Name | Investor Education and Protection Fund (IEPF) |
| Time Limit for Credit | 7 years of non-claim |
| Administered by | Central Government through an appointed Authority |
| Purpose | Investor education, awareness, and refund of unclaimed money |
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