Where the name of a person is entered in the register of members of a company as the holder of shares in that company but who does not hold the beneficial interest in such shares are Registered Owner and such person shall make a declaration to the Company. [Section 89(1)]
- Section 44, 56, 89 & 173 of Companies Act, 2013
- Rule 11 of the Companies (Share Capital and Debentures) Rules, 2014
- Rule 9 of the Companies (Management and Administration) Rules, 2014
- Beneficial owner shall make declaration to enforce his right in relation to any share. [Section 89(8)]
- Every person who holds or acquires a beneficial interest in share of a company is Beneficial Owner and such person shall also make a declaration to the company. [Section 89(2)]
Following Procedure is to be followed
- Declaration by the Registered Owner [Rule 9(1) of the Companies management and Administration Rule, 2014]
The Registered Owner shall file a declaration to the Company that his name has been entered in the Register of Members as a Shareholder but he doesn’t have any beneficial interest in such shares, in Form MGT-4 within 30 days from the date on which his name is entered in the Register by the Company.
- Declaration by Beneficial Owner [Rule 9(2) of the Companies management and Administration Rule, 2014]
The beneficial owner shall file a declaration that he holds the beneficial interest in shares that are not registered in his name, in Form MGT-5 within 30 days of acquiring such beneficial interest in the shares of the Company.
- Convene a Meeting of Board of Directors [As per section 173 & Secretarial Standard-1 (SS-1)]
- On receipt of declaration in respect of beneficial interest, company shall issue Notice of Board Meeting to all the Directors of Company at their addresses registered with the Company, at least 7 days before the date of Board Meeting. A shorter notice can be issued in case of urgent business.
- Attach Agenda, Notes to Agenda and Draft Resolution with the Notice.
- Hold a meeting of Board of Directors of the Company and pass the following resolutions
- to take note of declarations given by the Registered Owner and Beneficial Owner.
- to authorize Company Secretary or Director or any other person of the company to make entry in the Register of Members.
- to authorize CS or Director to file Return of Declaration with ROC.
- Prepare and Circulate Draft Minutes within 15 days from the conclusion of the Board Meeting, by Hand/Speed Post/Registered Post/Courier/E-mail to all the Directors for their comments. [Refer the Procedure for Preparation and Signing of Minutes of Board Meeting]
- Make necessary entries in the Register of Members
Company shall make necessary entries in the Register of Members in Form MGT-1 within 7 days from the date of receiving approval from the Board of Directors or receiving declarations from Registered Owner or Beneficial Owner.
- File Return of Declaration to ROC
Company shall file within a period of thirty days from the date of receipt of declaration by it, a return in Form MGT-6 with the Registrar in respect of such declaration with fee.