Section 187C: Shareholders Must Declare Beneficial Owners; Non-Compliance Leads to Fines; Companies Must Update Registers
Section 187C of the Companies Act, 1956 requires individuals whose names appear as shareholders but who do not hold beneficial interest to declare the actual beneficial owner to the company. Beneficial owners must also declare their interest within thirty days of acquiring it or any change thereof. Companies must record these declarations in their register of members and file a return with the Registrar. Non-compliance by individuals or companies results in fines. Certain collateral agreements related to undeclared shares are unenforceable. The section does not affect a company's obligation to pay dividends and excludes certain trustees post-2000 amendments.
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