Section 72: Power to nominate
This section is for allowing security holders in a company to nominate someone to inherit their securities in the event of their death.
The section, clause by clause
What the section says
In plain terms
(1)Every holder of securities of a company may, at any time, nominate, in the prescribed manner, any person to whom his securities shall vest in the event of his death.
A security holder in a company can nominate someone to inherit their securities if they die, and this can be done at any time in a specific manner.
(2)Where the securities of a company are held by more than one person jointly, the joint holders may together nominate, in the prescribed manner, any person to whom all the rights in the securities shall vest in the event of death of all the joint holders.
If multiple people jointly own securities, they can together nominate one person to inherit all their rights in the securities if all the joint holders die.
(3)Notwithstanding anything contained in any other law for the time being in force or in any disposition, whether testamentary or otherwise, in respect of the securities of a company, where a nomination made in the prescribed manner purports to confer on any person the right to vest the securities of the company, the nominee shall, on the death of the holder of securities or, as the case may be, on the death of the joint holders, become entitled to all the rights in the securities, of the holder or, as the case may be, of all the joint holders, in relation to such securities, to the exclusion of all other persons, unless the nomination is varied or cancelled in the prescribed manner.
When a nomination is properly made, the nominee will automatically get all the rights to the securities when the security holder or all joint holders die, and this will override any other instructions or laws.
(4)Where the nominee is a minor, it shall be lawful for the holder of the securities, making the nomination to appoint, in the prescribed manner, any person to become entitled to the securities of the company, in the event of the death of the nominee during his minority.
If the nominated person is a minor, the security holder can also choose an adult to manage the securities if the minor nominee dies before becoming an adult.
(4)CHAPTER V ACCEPTANCE OF DEPOSITS BY COMPANIES
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
Amendment notes
- 1. Sub-section (11) omitted by Act 29 of 2020, s. 15 (w.e.f. 21-12-2020).
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Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.