Section 89 - Declaration in respect of beneficial interest in any share

Disclosure of beneficial share ownership under Section 89: duties, penalties, and limits on unreported owners' rights

Section 89 of the Companies Act, 2013 mandates disclosure of beneficial ownership in shares where the registered holder is different from the beneficial owner. The registered holder and the beneficial owner must declare initial and subsequent changes in beneficial interest to the company within prescribed time, enabling the company to note it in its register and file returns with the Registrar. Non-compliance by individuals or companies attracts monetary penalties, capped for both. A beneficial owner who fails to declare cannot enforce rights in respect of such shares, though the company's obligation to pay dividends to registered members remains unaffected. Beneficial interest includes rights to exercise share rights or receive dividends, directly or indirectly. The Central Government may make rules and grant exemptions, except from the definition of beneficial interest.