Section 72 of the Companies Act, 2013
Section 72 of the Companies Act, 2013 deals with Nomination related to securities (like shares, debentures, etc.) held by a person in a company.
📘 Section 72 – Power to Nominate
(1) Nomination by a Security Holder:
A holder of securities (like shares, debentures) of a company may nominate any person to whom their securities will vest in the event of their death.
This nomination is done individually or jointly by filling a prescribed form and submitting it to the company.
(2) Rights of the Nominee:
Upon the death of the security holder(s), the nominee becomes entitled to all the rights in the securities to the exclusion of all other persons (i.e., legal heirs, unless otherwise challenged in court).
(3) Minor Nominee:
If the nominee is a minor, the security holder can also appoint a person to act on behalf of the minor in case the holder dies while the nominee is still a minor.
📝 Important Notes:
This section ensures smooth transmission of securities after death without lengthy legal processes like probate or succession certificate.
It’s especially useful for individual investors to safeguard the interest of their family or dependents.
✅ Practical Example:
Suppose Mr. A holds 500 shares in a company. He nominates his daughter as the nominee. If Mr. A dies, his daughter will directly inherit those shares, even if his will says otherwise, unless a competent court decides otherwise.
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