MAINTENANCE OF THE REGISTER OF MEMBERS OR DEBENTURE – HOLDERS

Sub – section (1) of Section 88 of the Companies Act 2013 not only cost on company an obligation to keep registers of members, debentures or other security holders but also cost an obligation to maintain these registers. Rules 5 of the Companies (Management and Administration) Rules 2014 lay down manner of this maintenance.

Every company shall maintain the registers in the following manner namely:-

The entries in the registers maintained under section 88 shall be made within seven days after the Board of Directors or its duly constituted committee approves the allotment or transfer of shares, debentures or any other securities, as the case may be. [Sub – Rule (1)]

Here, days are not working days but days. This effectively translates to five or six working days depending upon companies policies and holidays.

The registers shall be maintained at the registered office of the company unless a special resolution is passed in a general meeting authorising the keeping of the register at any other place within the city, town or village in which the registered office is situated or any other place in India in which more than one-tenth of the total members entered in the register of members reside. [Sub – Rule (2)]

This sub – rule clearly gives following three options only:

1. Registered office of the company, or
2. Any other place within same city, town, village under authority of special Resolution, or
3. Any other place in India where more than one – tenth of total members resides under authority of special Resolution.

The registers shall not be maintained at corporate office, factory, branch office or any other premises without authority of special resolution and without fulfilling condition related to location. A company having registered office in Delhi, shall not maintain these registered in corporate office situated in Gurgaon unless more than one – tenth of total members resides as per official record in Gurgaon itself.

Consequent upon any forfeiture, buy-back, reduction, sub-division, consolidation or cancellation of shares, issue of sweat equity shares, transmission of shares, shares issued under any scheme of arrangements, mergers, reconstitution or employees stock option scheme or any of such scheme provided under this Act or by issue of duplicate or new share certificates or new debentures or other security certificates, entry shall be made within seven days after approval by the Board or committee, in the register of members or in the respective registers, as the case may be. [Sub – Rule (3)]

If any change occurs in the status of a member or debentures holder or any other security holder whether due to death or insolvency or change of name or due to transfer to Investor Education Protection Fund or due to any other reason, entries thereof explaining the change shall be made in the respective register. [Sub – Rule (4)}

Even thought there is no time frame is given in this sub – rule, it will be prudent to make an entry within seven days of receiving relevant information.

If any rectification is made in the register maintained under section 88 by the company pursuant to any order passed by the competent authority under the Act, the necessary reference of such order shall be indicated in the respective register. [Sub – Rule (5)]

Even thought there is no time frame is given in this sub – rule, it will be prudent to make an entry within seven days of receiving of order or within time-frame given in the order whichever is earlier.

If any order is passed by any judicial or revenue authority or by Security and Exchange Board of India (SEBI) or competent authority attaching the shares, debentures or other securities and giving directions for remittance of dividend or interest, the necessary reference of such order shall be indicated in the respective register. [Sub – Rule (6)]

Even thought there is no time frame is given in this sub – rule, it will be prudent to make an entry within seven days of receiving of order or within time-frame given in the order whichever is earlier.

In case of companies whose securities are listed on a stock exchange in or outside India, the particulars of any pledge, charge, lien or hypothecation created by the promoters in respect of any securities of the company held by the promoter including the names of pledgee/pawnee and any revocation therein shall be entered in the register within fifteen days from such an event. [Sub – Rule (7)]

If promoters of any listed company, which has formed a joint venture company with another company have pledged or hypthoticated or created charge or lien in respect of any security of the listed company in connection with such joint venture company, the particulars of such pledge, hypothecation, charge and lien shall be entered in the register members of the listed company within fifteen days from such an event. [Sub – Rule (8)]

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