Declaration in Respect of Beneficial Interest in any Share

Generally, there are two types of shareholders in the company- Registered shareholder and Beneficial Shareholder. Registered shareholders are those whose names are registered as shareholder in the register of members of the company. On the other hand, beneficial shareholders are that shareholders whose name is not entered in the register of members however they hold a beneficial interest in the shares. This article talks about that shareholder who actually holds the beneficial interest in the shares (who receives the benefits of share i.e. dividend, bonus issue etc.) but whose name is not entered as the member/shareholder in the register of the company. Let us take an example to understand this situation, a HUF can become the member/shareholder of the company through its Karta only i.e. in the register the name of Karta will be registered as the shareholder but actually, the beneficial interest in the shares are held by the HUF. Such registered and beneficial owners are required to file certain declarations to the company. Thereafter, Company is required to make disclosure of beneficial interest to the ROC.

Declaration in Respect of Beneficial Interest in any Share

As per section 89 of the companies act 2013

OBLIGATION OF THE REGISTERED HOLDER 

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, such person shall make a declaration to that effect in Form No.MGT.4, within a period of thirty days from the date on which his name is entered in the register of members of such company.

Also, where any change occurs in the beneficial interest in such shares, the registered owner shall, within a period of thirty days from the date of such change, make a declaration of such change to the company in Form No.MGT.4

OBLIGATION OF THE COMPANY

Where any declaration under section 89 is received by the company, the company shall make a note of such declaration in the register of members and shall file, within a period of thirty days from the date of receipt of declaration by it, a return in Form No.MGT.6 with the Registrar in respect of such declaration with fee.

OBLIGATION OF BENEFICIAL OWNER

Every person holding and exempted from furnishing declaration or acquiring a beneficial interest in shares of a company not registered in his name (hereinafter referred to as “the beneficial owner”) shall file with the company, a declaration disclosing such interest in Form No. MGT.5  within thirty days after acquiring such beneficial interest in the shares of the company.

Also where any change occurs in the beneficial interest in such shares, the beneficial owner shall, within a period of thirty days from the date of such change, make a declaration of such change to the company in Form No.MGT.5

So, Companies are required to file the MGT-6  that shall contain MGT-4 and MGT-5 as an attachment.

[Provided that nothing contained in this rule shall apply in relation to a trust which is created, to set up a Mutual Fund or Venture Capital Fund or such other fund as may be approved by the Securities and Exchange Board of India]

FEES FOR FILING MGT-6