Status of Nominee in Companies Act, 1956

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03 December 2010 Dear All,

Please solve my following problum..
1) what is the status of Nominee in Companies Act,1956?
2) How many Companies in which an individual hold a position of nominee?
3) can an individual represent as anominee of Individual?

Regards,
zaffar

03 December 2010 Dear sir,

As per my understanding Mr. A can be a shareholder in 100 (or more) companies and can nominate his Son in all 100 companies.

So a person can be a nominee in any number of companies. As far as i know company law is silent.

Would request u to wait for other sound opinions.

Regards

09 December 2010 sir,

if a individual appointed as a nominee for individual, then whether he can avail all the benifts what are given to a general shareholder or not ??

25 July 2025 Great questions about nominees under the Companies Act, 1956! Here's a detailed answer:

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### 1) **Status of Nominee in Companies Act, 1956**

* The **Companies Act, 1956** does **not specifically define or regulate โ€œnomineesโ€** as a separate category of shareholders or directors.
* A **nominee is basically a person who holds shares or a position on behalf of another person (the beneficial owner)**.
* Legally, a nominee is treated as a **shareholder or director** (depending on the role) in their own capacity with all the rights and duties that come with that position.
* However, the beneficial ownership lies with the person who appointed the nominee.

---

### 2) **Number of Companies in which an individual can hold a position as a nominee**

* There is **no statutory limit** on how many companies an individual can act as a nominee shareholder or nominee director.
* An individual can be a nominee in **any number of companies**.
* The only restriction applies if the individual acts as a **director** โ€” then **the Companies Act restricts the maximum number of directorships** one can hold:

* Under the Companies Act, 2013 (which replaced the 1956 Act), a director can hold up to 20 directorships in companies.
* Under the 1956 Act, similar restrictions were there but less clear.
* For nominee shareholders, there is **no such restriction**.

---

### 3) **Can an individual represent as a nominee of another individual?**

* Yes, an individual can be appointed as a nominee shareholder or nominee director by another individual.
* The nominee holds shares or office in name but acts according to instructions or agreements with the beneficial owner.
* The nominee has **legal title** to shares and can exercise voting rights unless restricted by any agreement.

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### 4) **Can a nominee avail all benefits given to a general shareholder?**

* Yes, a nominee is legally the **registered shareholder** and is entitled to all the rights of a shareholder, including:

* Voting rights at meetings
* Dividend payments
* Rights to transfer shares
* Rights to receive notices and reports
* However, the nominee **usually acts on behalf of the beneficial owner** and transfers or exercises rights as instructed.
* If the nominee acts independently, they enjoy all shareholder rights.
* Any benefits intended for the beneficial owner usually flow through the nominee, as per the agreement between them.

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**Summary:**

| Question | Answer |
| ---------------------------------- | ---------------------------------------------------------- |
| Status of Nominee | Registered shareholder/director, no special status in law. |
| Number of companies as nominee | Unlimited for shareholders; directors limited as per law. |
| Can represent another individual | Yes, nominee can represent and hold shares/office. |
| Rights and benefits as shareholder | Yes, nominee enjoys all shareholder rights legally. |

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If you want, I can help you draft a nominee agreement or explain how nominee arrangements work in practice. Would you like that?


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