Form 5 INV is not required to be filed in every case

Share
When
a Company is required to file form 5 INV?
As per Rule 3 of Investor Education and
Protection Fund (Uploading of
information regarding   unpaid & unclaimed amount lying with
companies) Rules 2012, every company (including Non-banking Financial companies and
Residuary Non-Banking Companies) shall, within a period of 90-days  after the holding of Annual General Meeting or
the date on  which it should have been held as per the provisions of
section 166 of the Act and every year thereafter till completion of seven years
period, identify the unclaimed amounts as referred in sub-section (2)
of section 205C or in Act, separately furnish and upload on its website and
also on the Ministry’s website or any other website as may be specified by the
Government a statement or information through e Form 5 INV’ separately for each
year’ containing following
information, namely:


a) the names and last
known addresses of the persons entitled to receive the sum;
b) the nature of
amount;
c) the amount to which
each person is entitled;
d) the names and last
known addresses of the persons entitled to receive the sum;
e) the nature of
amount;
f) the amount to
which each person is entitled;
When 
a co is required  to credit amount to investor education & protection
fund?
As per clause (b) of
sub sec 2 of Sec 205C, the application moneys
received by companies for allotment of
any securities and “due” for refund  shall be credited to
Investor protection & Education fund;
Provided that no such
amounts referred as above shall form part of the Fund unless such amounts have
remained unclaimed and unpaid for a period of seven years from the
date they became due for payment.
In short, Application
amount shall be transferred to such fund ONLY  after  expiry of 7
years from the date it becomes “due”.
When
does share application money becomes “due” for payment?
A
question arises when does such application money become “due” under the
Companies Act, 1956?
The companies Act,
2013, prescribes that share application money shall be refunded with 15 days
from the expiry of 60 days from the date of receipts of application money.
However, there is no such restriction under the companies Act, 1956. Should we
assume that there is a blanket allowance  & company can keep share application
money without any limit of refund. I am of the firm view that if any share
application money is received, company should in its board meeting either
reject or accept application (within next 2-3 board meetings).To be on safer
side, date of Board meeting on which   decision  to refund
application has been taken, may be considered as “due date” under
Companies Act, 1956.
Circumstances
when form 5 inv is required to be filled:
1) Company shall
identify the unclaimed amounts of share application “due” within a period
of 90-days  after the holding of Annual General Meeting.
2) Hence, if
application money is not due within such 90 days, company is not required to
file Form 5 INV.
3) However,
kindly read above para, to determine whether an application money is due or
not.
Example
1: 
A company received share application money in Jan
2011, which is lying in the share application a/c as on 31.3.13 & non
compliance notice is received from ROC.
Case
(a): 
Such money had already been refunded before 90 days
from the date of AGM or
Case
(b):
 Share had been allotted before 90 days from the
date of AGM. However, Return of allotment
had not been filed.
Case
(c): 
Co with mutual consent transferred investment to
shareholder in lieu of application money after 31.3.2013, but before 90 days
from the date of AGM.
Case
(d): 
Co with mutual consent converted share application
money to Loan after 31.3.2013, but before 90 days from the date of AGM.
Suggestions:
Case
(a): 
Reply to ROC stating the fact that as money had been
refunded before 90 days from the date of AGM, the company had identified the
unclaimed amounts as “NIL” & hence such form had not been submitted.
Case
(b):
– File
 Return of Allotment now &
– Submit a reply to
ROC stating the fact that as shares had been allotted before 90 days from the
date of AGM, company had identified, the unclaimed amounts as NIL & hence
such form had not been submitted.
Case
(c): 
Reply to ROC stating the fact that the company had
identified the unclaimed amounts as “NIL” & hence such form had not been
submitted.
Case
(d): 
Reply to ROC stating the fact that the company had
identified the unclaimed amounts as “NIL” & hence such form had not been
submitted.
Example
2: 
A company received share application money in Jan
2011, which is lying in the share application a/c as on 31.3.13 & non
compliance notice is received from ROC. Such money had either already been
refunded or share had been allotted  before 1.4.14. However, Return of
allotment had not been filed.
Suggestions:
a) Form 5
INV  now. Also file  Return of Allotment, if shares had been allotted
. As allotment has been made under Companies Act, 1956, MGT 14 is not required
to be filled.
b) Submit a
reply to ROC stating that due to inadvertent such form had not been filed .
However, it has already been filed.
c) Kindly note
that Application amount is required to be transferred to such fund only after 7
years from the date it becomes “due”.
d) After filling
such form, an acknowledgement will
be generated (see attachment) .
In such acknowledgement, you are requested to upload all the investor wise
details of unclaimed and unpaid amounts on IEPF portal within l4 days of
filings Form5lNV. While uploading such list, you will be asked to mention
proposed date of  transfer to the account of Central Govt . You have to be
careful while filling this date.  This date should be a date after the
expiry of  7 years from the date it becomes “due”.
Example
3: 
A company received share application money in Jan
2014, which is lying in the share application a/c as on 31.3.14. Co with mutual
consent converted share application money to Loan after 31.3.2014. Can company
do so?
Suggestions:  No,
company cannot adjust share application amount & company have to refund it
to the applicant w.e.f  01.04.2014 . As per Explanation (b)
to clause (vii) of the definition of deposit under Companies (acceptance of
deposit) Rules, 2014 , any adjustment of share application money shall not be
treated as refund.  As per  sec 42(6),  A company making an
offer or invitation under this section shall allot its securities within sixty
days from the date of receipt of the application money for such securities and
if the company is not able to allot the securities within that period, it
shall repay the application money to the subscribers within fifteen
days from the date of completion of sixty days and if the company fails to
repay the application money within the aforesaid period, it shall be liable to
repay that money with interest at the rate of twelve per cent. per annum from
the expiry of the sixtieth day: monies received on application under this
section shall be kept in a separate bank account in a scheduled bank and shall
not be utilised for any purpose other than—
(a) for adjustment
against allotment of securities; or

(b) for the repayment
of monies where the company is unable to allot securities.
RECOMMENDED READ  What is Producer Company? As per Companies Act, 2013

Leave a Reply

Written by

Optimization WordPress Plugins & Solutions by W3 EDGE
%d bloggers like this: