nomination of shareholders

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binita (Querist)
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21 October 2010 Let us consider A, a listed company, acquires all shares of B, another public ltd. co.Now to bring the min. no.of members to 7 A nominates another 6 individuals to be members of B apart from itself(1+6=7)and arranges to transfer 1 share each in the names of these 6 people(these 6 will not be paying for these shares). If A has to retain its 100% ownership status should these 6 people appear in B's register of members as joint holders in respect of these 6 shares with A or should they appear as nominees only?
What will be the legal difference in both cases?
Also advice regarding giving of declaration of beneficial ownership under sec. 187C of Cos. Act. Will it be required in case of joint holdership?

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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29 October 2010 They should appear as nominee only. As these 6 individuals does not hold beneficial interest in the shares.

Compliance under 187C

1. Nominee shareholder should make declaration to the company in Form 1 (IN DUPLICATE)within 30 days after his name is entered in the register of member.

2. Company shall file form 22B within 30 days from the date of receipt of declaration. (Attached declaration received in Form I)

In case of joint shareholding 187C does not apply as there is no inter se trustee-beneficiary relationship is created.

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