Referring the provisions of Section 125 of the Companies Act, 2013, explain the purposes for which Investor Education and Protection Fund may be utilized.
CS Professional · Governance, Risk Management, Compliances and Ethics · PYQS · December 2023
Referring the provisions of Section 125 of the Companies Act, 2013, explain the purposes for which Investor Education and Protection Fund may be utilized.
Answer & Explanation:
According to Section 125(3) of the Companies Act, 2013 - the Fund shall be utilised for- The refund in respect of unclaimed dividends, matured deposits, matured debentures, the application money due for refund and interest thereon; Promotion of investors' education, awareness and protection; Distribution of any disgorged amount among eligible and identifiable applicants for shares or debentures, shareholders, debenture-holders or depositors who have suffered losses due to wrong actions by any person, in accordance with the orders made by the Court which had ordered disgorgement; Reimbursement of legal expenses incurred in pursuing class action suits under sections 37 and 245 by members, debenture-holders or depositors as may be sanctioned by the Tribunal; and Any other purpose incidental there to, in accordance with Rule 3 of the Investor Education and Protection Fund Authority (accounting, Audit, Transfer and Refund) Rules, 2016.
Topics: Company Law
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