Section 187: Investment of Company to be held in its own name

CS Divesh Goyal | Last updated: 06 August 2021

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Section 187 of the Companies Act mandates that all investments made by a company, whether in property, securities, or other assets, must be held in its own name. This prevents 'benami' investments. However, there are specific exemptions, such as holding shares in a wholly-owned subsidiary through a nominee to maintain minimum member requirements, or depositing shares with a bank for dividend collection or transfer facilitation. Companies can also transfer investments as security for loans or obligations, or hold them via a depository as a beneficial owner, provided certain compliance rules are met.

Section 187 shall be applicable to all type of Companies. It applies on Private as well as Public Limited Companies. a) As per Section 187(1) All investments made or held by a company in any property, security or other asset shall be made and held by it in its own name. As per sub section 1, C

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About the Author

CS Divesh Goyal

Practicing Compnay Secretary

CAREER PROFILE He is a Fellow Member of the Institute of Companies Secretaries of India having intense expertise in Corporate Law for the last 8 years. He is a young and progressive Practicing Company Secretary with zeal to dig deep into the nuances of Corporate Laws. Being a researcher at heart, he has done ... Read more

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