The Ministry of Corporate Affairs has issued a notification S.O.
125(E), dated January 13th, 2016, wherein it has notified the
following provisions of subsection (5), sub-section (6) [except
with respect to the manner of administration of the Investor
Education and Protection Fund] and sub-section (7) of section 125
of the Companies Act, 2013 shall come into force. Section 125 of
Companies Act, 2013 deals with Investor Education and Protection
Fund wherein the above said sub-sections (5), (6) and (7) deal with
constituting an authority for administration of the Fund,
appointment of its chairperson, members and chief executive
officer, and Central Government providing to such authority
offices, officers, employees and other resources.
Further, in exercise of powers conferred by sub-section (5),
sub-section (6) and sub-section (7) of section 125 of the Companies
Act, 2013, the Central government has also issued Investor
Education and Protection Fund Authority (Appointment of Chairperson
and Members, holding of meetings and provision for offices and
officers) Rules, 2016.
IEPF Authority would advise the central government on issues
related to investors' interest. IEPF Authority shall be set up
under the Companies Act, 2013 for administration of the Investor
Education and Protection Fund. It shall consist of a Chairperson,
six members and a Chief Executive Officer. As per the Rules, the
Secretary of Ministry of Corporate Affairs shall be the ex-officio
Chairperson of the Authority, and the Chief Executive Officer shall
be the convenor of the Authority. Also, the members would include
one representative each from RBI and SEBI as ex-officio members,
and four persons having special knowledge and experience of not
less than fifteen years, in finance, management, accountancy or law
with one person from each discipline and such person shall have
special knowledge, or professional experience, which shall in the
opinion of the Central Government shall be useful to the
The functions of the Authority state the duty to administer the
Fund for Investor Education and Protection. The Authority may
constitute permanent Committees for overseeing its functions.
Schedule II of the Rules prescribes functions for the following
Functional Divisions of the Authority:
1. Administration: For administrative functions necessary or
deemed expedient for fulfilling the objects of the Fund.
2. Investment/ Funds Management: For maintaining funds standing
to the credit of Fund and investing the same in interest bearing
account of any nationalized bank. Also, for opening of depository
account of authority and transferring securities of investor.
3. Claims and Settlement: For making refunds to eligible
investors, distribution of disgorged amount in consultation with
Legal and Enforcement Division and as per court's order or the
Authority's order, to eligible and identified security holders
who have suffered losses due to any wrong actions of any person in
accordance with the order of Tribunal or order of the Authority, as
the case may be.
4. Legal and Enforcement: For initiation and handling of
disputes and legal cases arising out of claims or settlement or any
5. Investor Education and Protection:
(i) Registering associations or institutions or professional
bodies or chambers of commerce and industry or other organizations
engaged in investor education and protection activities.
(ii) Sanctioning grants to the registered entities for seminars,
programmes, projects or activities in the field of corporate
governance, Investors' Education and Protection including
(iii) Monitoring of the utilisation of the grants to ensure the
achievements of the objectives of the sanctioning of the
(iv) Cooperating and collaborating with institutions engaged in
Investor Education, corporate governance, awareness, and protection
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The Ministry of Corporate Affairs notified on June 5, 2015 that certain provisions of the Companies Act, 2013 shall not apply to private limited companies or shall apply with such exceptions or modifications as directed in the notification.
Whilst trade and barter have existed since early times, the modern practice of forming business relationships through the means of contract has come into existence only since the industrial revolution in the West.
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