Sections 109A and 109B contain provisions regarding nomination facility to shareholders and debentureholders. Section 58A(11) relates to nomination facility to deposit-holders of a company. Rules 4CCC and 5D of the Companies (Central Government's) General Rules and Forms, 1956 and Form 2B has also prescribed procedural guidelines pertaining to use of the nomination facility by shareholders, debentureholders and deposit-holders of a company. Section 109A(1) of the Act, provides that every holder of shares in, or holder of debentures of, a company may at any time, nominate in the prescribed manner, a person to whom his shares in, or debentures of the company shall vest in the event of his death.
Only individuals can use nomination facility. Non-individual members or debentureholders like body corporate, trust, society, HUF-Karta, power of attorney holder, etc., cannot nominate. Where the shares or debentures of a company are held by more than one person jointly, the jointholders may together nominate a person to whom the shares or debentures shall vest in the event of death of all the joint holders. Form 2B itself states that it is to be filled in by individual applying singly or jointly, if jointly, only up to two persons. Following important observations in this regard may be noted.
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