The main difference between the “Letter of Entitlement” and the “Letter of Confirmation” is that the Letter of Confirmation can be dematerialised.
The Letter of Confirmation is like an actual Share Certificate and is issued only for those shares that are not in IEPF.
Whereas, the Letter of Entitlement is issued for those shares that have been transferred to IEPF and it mentions the no. of shares that have been transferred to IEPF along with the list of the Dividend amounts that have been transferred to IEPF.
Letter of Entitlement cannot be dematerialised. This Letter is needed to start uploading the IEPF claim application of IEPF Portal.
Circumstances under which Letter of Confirmation is issued:
When original share certificates are lost and the shareholder applies for the issue of Duplicate Shares Certificate . Since the Companies do not issue Share Certificates now, they issue a Letter of Confirmation after processing the application for issue of duplicate shares.
When there is Transmission / Name Deletion due to the death of any one/all the holders of the shares in a folio. After processing the Transmission / Name Deletion, a Letter of Confirmation is issued by the Company.
It is important to note that Letter of Confirmation is only issued for the shares that have NOT been transferred to IEPF. In the above two cases mentioned above, if the shares are in IEPF then the Company will issue a Letter of Entitlement after processing the request for duplicate shares or after processing the Transmission / Name Deletion. Based on the Letter of Entitlement, the process to file a claim for shares & dividends from IEPF can start .
To summarize the key points:
Letter of Confirmation:
- Can be dematerialized and treated like an actual share certificate.
- Issued in cases where original share certificates are lost, and the shareholder applies for the issuance of duplicate shares.
- Issued in cases of transmission or name deletion due to the death of a shareholder.
- Only issued for shares that have not been transferred to IEPF.
Letter of Entitlement:
- Cannot be dematerialized.
- Issued for shares that have been transferred to IEPF.
- Specifies the number of shares transferred to IEPF and lists the unclaimed dividend amounts transferred to IEPF.
- Needed to start the IEPF claim application process.
Unclaimed Shares and Dividends – LoC & IEPF Entitlement Letter Process
Upon receiving the Letter of Confirmation (LoC), the shareholder must submit this Letter of Confirmation along with a filled Demat Request Form (DRF) to the Depository Participant (DP) within 120 days so that the shares mentioned in the LoC can be credited to the demat account of the shareholder. It is recommended that the LoC and DRF be submitted at the earliest possible without waiting for the last date because it takes about 2-3 weeks for the DRF to be processed.
In case the shares are in IEPF, the shareholder will receive an “Entitlement Letter”. Upon receiving the “Entitlement Letter”, the shareholder must file the IEPF claim online through the MCA portal by filling the Form IEPF-5 online. The shareholder should keep a scanned copy of the Letter of Entitlement ready along with the scanned copies of PAN, Aadhaar etc. while filling the Form IEPF-5 online. The Entitlement Letter mentions the year wise amount of unclaimed dividends. While filling the Form IEPF-5, these year wise unclaimed amounts are also to be entered.
It is crucial for individuals involved in share transactions to be aware of these distinctions to navigate the processes accurately.
