Companies Act Section 72 — Power to nominate
CHAPTER IV SHARE CAPITAL AND DEBENTURES
Commercial / Corporate
Summary
Sub-section (1) allows any person who holds securities of a company to nominate, at any time and in the prescribed manner, another person to receive those securities when the holder dies.
Sub-section (2) covers securities held jointly by more than one person. In that case, all the joint holders together may nominate, in the prescribed manner, a person to receive all the rights in the securities if all the joint holders die.
Sub-section (3) states that, regardless of any other law or any will or other arrangement dealing with the securities, if a nomination is made in the prescribed manner, the nominee becomes entitled to all the rights in the securities upon the death of the holder (or of all the joint holders, as applicable). This entitlement is to the exclusion of all other persons, unless the nomination is varied or cancelled in the prescribed manner.
Sub-section (4) provides that if the nominee is a minor, the holder making the nomination may appoint, in the prescribed manner, another person to become entitled to the securities in the event that the minor nominee dies before reaching adulthood.
Official Text
(1) Every holder of securities of a company may, at any time, nominate, in the prescribed manner, any person to whom his securities shall vest in the event of his death.
(2) Where the securities of a company are held by more than one person jointly, the joint holders may together nominate, in the prescribed manner, any person to whom all the rights in the securities shall vest in the event of death of all the joint holders.
(3) Notwithstanding anything contained in any other law for the time being in force or in any disposition, whether testamentary or otherwise, in respect of the securities of a company, where a nomination made in the prescribed manner purports to confer on any person the right to vest the securities of the company, the nominee shall, on the death of the holder of securities or, as the case may be, on the death of the joint holders, become entitled to all the rights in the securities, of the holder or, as the case may be, of all the joint holders, in relation to such securities, to the exclusion of all other persons, unless the nomination is varied or cancelled in the prescribed manner.
(4) Where the nominee is a minor, it shall be lawful for the holder of the securities, making the nomination to appoint, in the prescribed manner, any person to become entitled to the securities of the company, in the event of the death of the nominee during his minority.