Procedure for registration of shares in the name of nominee: By the virtue of nomination, a nominee is entitled to any shares. For this he will have to apply to the company along with proof of death of holder or joint holders. A nominee can either request the board of directors to register himself and the shareholder or he can transfer the shares of deceased shareholder [section 109B(1) of the companies Act, 1956]
A written notice is to be sent to the company by the nominee stating that he elects to be the registered holder of share. The notice should be accompanied by death of deceased shareholder [section 109B(2)]
Section 109B(3) states all the limitation, restrictions and provisions of the company act relating to the right to transfer and registration of transfer. It will apply as if the death of the member had not occurred and the notice of transfer were signed by the shareholder.
Nominee’s right to receive dividend etc.:-
(i) All the rights of deceased member like dividend and bonus etc. are entitled to the nominee.
(ii) The nominee will not be eligible for voting right or other right as a member unless he makes an application in writing and is registered as a member in respect of the shares [section 190B(4)]
(iii) If the nominee does nothing the company empowers him a notice to elect either to become a member or transfer the shares.
(iv) Board of Directors of the company can withhold the payment of dividends, bonus or other money payable, if the nominee does not elect either to become a member of transfer the shares within 90 days of the notice. [section 109B(4)]
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