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Nominee shareholder

Jyoti Aggarwal (COMPANY SECRETARY) (336 Points)

20 July 2013

Hello Friends,

Please let me know can a person hold as a nominee shareholder on behalf of other individual.

As per my understanding, nominee shareholder can be appointed on behalf of the company but my question is can he hold the share on behalf of individual also?

Please reply urgently.

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8 Replies

Ajay Mishra (Company Secretary) (74332 Points)
Replied 20 July 2013

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.

Ajay Mishra (Company Secretary) (74332 Points)
Replied 20 July 2013

Who may use nomination facilities?

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.

Ajay Mishra (Company Secretary) (74332 Points)
Replied 20 July 2013

In case of Companies, the provision of section 187 will apply. For more details, go to the folloeing link

https://www.advocatekhoj.com/library/rules/companiesdeclaration/index.php?Title=Companies%20%20%20(Declaration%20of%20Beneficial%20Interest%20in%20Shares)%20Rules,%201975

Jyoti Aggarwal (COMPANY SECRETARY) (336 Points)
Replied 22 July 2013

Thanks a lot Mr. Ajay.

It means an individual can also appoint his nominee.

Please let me know that from where I will get the form 2B as u mentioned.

Jyoti Aggarwal (COMPANY SECRETARY) (336 Points)
Replied 22 July 2013

Please also let me know that how we should intimate to ROC in case of nomination by individual.

whether Form 2B is required to be filed with ROC?

Please let me know the full procedure to be followed in case of a person holding share as nominee of other individual.

Jyoti Aggarwal (COMPANY SECRETARY) (336 Points)
Replied 22 July 2013

Mr. A holding 10000 shares in a co. but to make minimum no. of shareholder we need to appoint some other person to hold one share in his behalf, beneficial interest is lying with Mr.A.

As in case of co., for the same thing we have to follow Sec 187C but what about individual.

Sec 109 A tels about in case of death not in general case.

csmedha (Company Secretary) (91 Points)
Replied 10 June 2017

Can anyone assist in telling the procedure for transfer of nominee shareholder in case of private company?

In the case, Mr. A is nominee shareholder on behalf of Company (holding company) and now Company (holding company) proposes to change its nominee shareholder.

Will Section 89 of Companies Act, 2013 to be followed in this regard? Filing of MGT-4, MGT-5 and MGT-6 to be done in this case.

Here the company is Private Company.

Looking forward for your professional advice.

Thanks and Regards