Shareholders are considered as owner of the company as they invest money into the business and as per Companies Act, 2013 (“The Act”), shareholders are entitled to various rights such as voting right, right to dividend etc.
However, in certain cases, person holding shares in his name may not have the beneficial interest in such shares and some other person may have beneficial interest in those shares. Companies Act, 2013 (“The Act”) contains provisions related to reporting about such cases.
Table of Content
- 1 Meaning of Beneficial Interest (Section 89(10) of the Act)
- 2 Reporting to be made u/s 89
- 3 Reporting by company about Registered Owner and Beneficial Owner (Section 89(6) of the act read with Rule 9(3) of the Rules)
- 4 Information to be furnished in form MGT 6
- 5 Legal Fee applicable on filing of MGT 6
- 6 Additional Fee applicable in case of delay in filing of MGT-06
- 7 Penalty in case of non-filing or delay in filing of MGT 6 (Section 89(7) of the Act)
Meaning of Beneficial Interest (Section 89(10) of the Act)
Section 89(10) of the act defines beneficial interest in a share includes following right or entitlement of a person with respect to shares to (either directly or indirectly or through any contract or arrangement):
- exercise or cause to be exercised any or all of the rights attached to such shares or
- receive or participate in any dividend or other distribution in respect of such shares
Reporting to be made u/s 89
Provisions related to reporting about beneficial interest in shares is given in Section 89 of the act read with Rule 9 of The Companies (Management and Administration) Rules, 2014 (“The Rules”).
As per Section 89 of the Act, reporting about following instances is required to be made either by company or by shareholder:
|Reporting By||Reporting to||Matter to be reported||Form No.||Legal Reference|
|Person whose name is entered in register of members but who does not hold the beneficial interest in such shares (“The Registered Owner”)||The Company||A declaration about name and other particulars of the person who hold beneficial interest in shares||Fomr No. MGT-4||Section 89(1) of the act read with Rule 9 (1) of the Rules|
|Person who holds beneficial interest in shares of the company but doesn’t have shares registered in his name (The Benefiicla Pwner”)||The Company||A declaration about name of the person in whose name shares are registered and other information||Form No. MGT-5||Section 89(2) of the act read with Rule 9 (2) of the Rules|
|By Company||To Registrar of company (“RoC”)||Where company received any declaration in form MGT-4 or for MGT-5 then company shall file a return about such declaration to RoC||Form No. MGT-6||Section 89(6) of the act read with Rule 9 (3) of the Rules|
Reporting by company about Registered Owner and Beneficial Owner (Section 89(6) of the act read with Rule 9(3) of the Rules)
Where company is in receipt of any declaration in form MGT-4 or MGT-5, then the company shall make a note of such declaration in the register concerned and company shall file a return in MGT 6 with RoC intimating about such declaration within 30 days of receipt of declaration.
Return under section 89(6) of the act should be filed in form MGT-6.
Information to be furnished in form MGT 6
Company is required to furnish following information while filing MGT-6:
- Corporate Identification Number (“CIN”)
- Name and address of the company will auto-populate based on CIN
- Particulars of shares in respect of which the person whose name is entered in the register of members of the company as a holder of shares does not hold the beneficial interest in such shares
- Description about shares-Number of shares, Kind of shares, Face value of shares etc.
- Particulars of the registered holder-Name, address, date of entry of name in register etc.
- Particulars of beneficial holder-Name, address, Date of declaration, date of receipt of declaration by the company etc.
While filing return in form MGT-6, company is required to mandatory attach copy of declaration (Section 89(1), 89(2) or 89(3)) received pursuant to which company is filing MGT-6.
Legal Fee applicable on filing of MGT 6
Filing fee for MGT-6 will be based on nominal share capital of the company, which is as follows:
|Nominal Share Cpaital||Fee Applicable|
|Less than 1,00,000||INR 200|
|1,00,000 to 4,99,999||INR 300|
|5,00,000 to 24,99,999||INR 400|
|25,00,000 to 99,99,999||INR 500|
|1,00,00,000 or more||INR 600|
However, in case of company not having any share capital, fee of INR 200 will be applicable.
Additional Fee applicable in case of delay in filing of MGT-06
If company fails to files MGT-6 within prescribed time limit then additional fee shall be applicable based on delay in number of days:
|Period of Delay||Fee Applicable|
|Upto 30 days||2 times of normal fees|
|More than 30 days and upto 60 days||4 times of normal fees|
|More than 60 days and upto 90 days||6 times of normal fees|
|More than 90 days and upto 180 days||10 times of normal fees|
|More than 180 days||12 times of normal fees|
Further, in case of an IFSC company, the additional fee shall be applicable only after the expiry of 60 days from the date of receipt of declaration. However, if form is filed after 60 days, penalty shall be computed considering due date of 30 days even for IFSC Company.
Penalty in case of non-filing or delay in filing of MGT 6 (Section 89(7) of the Act)
If a company fails to file MGT-6 within 30 days from date of receipt of declaration then the company and every officer in default shall be punishable with fine of minimum INR 500 but not exceeding INR 1,000, and where the failure is a continuing one, further fine of maximum of INR 1,000 for every day during which failure continues shall be applicable.
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