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Investor Education & Protection Fund (Section 205C of the Companies Act, 1956)

Investor Education & Protection Fund (Section 205C of the Companies Act, 1956) :

The Central Government shall establish a fund, called as Investor Education and Protection Fund. The Fund shall be utilized for promotion of investors’ awareness and protection of the interests of investors in accordance with such rules as may be prescribed.

The following amounts shall be credited to the Fund:

(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 (a) to (d) as above;

(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:

However, the amounts referred to in clauses (a) to (d) shall not form the 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.

On the contrary no claims shall lie against the Investor Education and Protection Fund or the company in respect of individual amounts which were unclaimed and unpaid for a period of seven years from the dates that they first became due for payment and no payment shall be made in respect of any such claims.

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