FILING OF FORM 5 INV UNDER INVESTOR'S EDUCATION AND PROTECTION FUND -SECTION 205C of the Companies Act

MCA vide its circulr for filing form 5 INV - in its recent circular (24 July 2012)  has stated that  that Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, has mandated every company to file eForm 5INV containing the information of unclaimed and unpaid amounts as referred to in subsection (2) of section 205C of the Companies Act, 1956.

According to subsection (2) of section 205C of the Companies Act, 1956,

[205C. Establishment of Investor Education and Protection Fund.—

2) There shall be credited to the Fund the following amounts, namely:—
(a)    amounts in the unpaid dividend accounts of companies;
(b)    the application moneys received by companies for allotment of any securities and due for refund;
(c)    matured deposits with companies;
(d)    matured debentures with companies;
(e)    the interest accrued on the amounts referred to in clauses (a) to (d);
(f)    grants and donations given to the Fund by the Central Government, State Governments, companies or any other institutions for the purposes of the Fund; and
(g)    the interest or other income received out of the investments made from the Fund:
Provided that no such amounts referred to in clauses (a) to (d) 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.

From the above , it is clear if a company has balances outstanding in the accounts referred to above from (a) to (g) for a perior of seven years or more than seven years , then it has to be credited to IEPF fund .

Then it goes without saying , if a company do not have any balances outstanding in the clauses (a)to (g ) for seven years or more than seven years , need not file form 5INV.

Thus , MCA is keeping everyone to guess instead of making it plain reading .

Further , there is widespread complaint that excel sheet to be attached with the form 5INV has inherent defects and majority of the companies find it difficult to fill the form itself.

In such scenario, MCA has to immediately look into this defects and should also extend the deadline for futher period so that every company falls under the abvoe rule shall file the form without any procedural infirmities.

MCA has to make its circular to be more clear that the companies that do not have any balances under the heda  (a) to (g) under section 205C need not file form 5INV.

If a company has balances in the heads (a) to (h) of section 2 of the section 205C and in the year 2011 , if the such balances has crossed the period of seven years , then you have to file the form 5INV. (you have to transfer the same to IEPF fund in such cases). (then it becomes due for payment - as per section 205C of the Companies Act ,1956).

Data of last 7 years needs to be given till the date of AGM of 2011.
The latest circular on the subject is detailed below: From the circular , it is very clear that every company has to file form 5INV about their balances in

(a)    amounts in the unpaid dividend accounts of companies;

(b)    the application moneys received by companies for allotment of any securities and due for refund;

(c)    matured deposits with companies;

(d)    matured debentures with companies;

(e)    the interest accrued on the amounts referred to in clauses (a) to (d);

(f)    grants and donations given to the Fund by the Central Government, State Governments, companies or any other institutions for the purposes of the Fund; and

(g)    the interest or other income received out of the investments made from the Fund:

Provided that no such amounts referred to in clauses (a) to (d) 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.

Due for payment is the crucial word used in section 205 of the Companies Act . If a company has balance as described in (a) to (g) in the section 205 C of the Companies Act, if not more than seven has lapsed , then , such companies are mandated to file form 5 INV.

It is now clear that every company has to file form 5 INV mentioning the balances available in the above heads detailed from (a) to (h).

MCA has to clarifywhether a company either private or public which has not declared dividend andhas no balance is unpaid dividend is also mandated to file the form 5-INV?

MCA has now almost clarified and it has stated clearlly that one excel sheet has to be filed for the year 2011 and beyond for the unpaid dividend etc.