The Ministry of Corporate Affairs (hereinafter referred to as “MCA”) has rolled out a notification vide number G.S.R. 801(E) dated October 27, 2023, introducing important amendments in the provisions of Companies (Management and Administration) Rules, 2014. These amendments mandate every company to designate a person who shall be responsible for furnishing and extending cooperation for providing, information to the Registrar of Companies (hereinafter referred to as “ROC”) or any other authorized officer with respect to the beneficial interest in shares of the company. The beneficial interest in shares refers to the ownership or interest in the shares of the company held by an individual or entity, even if the shares are registered in someone else’s name. Section 89 and 90 of the Companies Act, 2013, deals with the provisions of beneficial interest.
Eligibility of Designated Person
Any of the following persons can qualify as a designated person:
- A Company Secretary, if there is a requirement of appointment of such company secretary under the Companies Act, 2013 and the rules made thereunder; or
- Key Managerial Personnel, other than the company secretary; or
- Every Director, if there is no Company Secretary or Key Managerial Personnel.
Deemed Designated Person
The notification also outlines the mechanism in case the company has designated no person. In such cases, the following persons shall be deemed to have been designated persons:
- Company Secretary, if there is a requirement of appointment of such company secretary under the Companies Act, 2013 and the rules made thereunder; or
- every Managing Director or Manager, in case a company secretary has not been appointed; or
- every director, if there is no company secretary or a Managing Director or Manager.
Additionally, every company is required to inform such details of the designated person in the annual return of the company. Further, in case the company changes the designated person at any time, it shall intimate the same with the ROC in e-Form GNL-2 under the Companies (Registration Offices and Fees) Rules, 2014. This notification has been rolled out with the objective of identifying the person in charge who shall possess and be held responsible for the information related to the beneficial interest in shares of the company. This notification has streamlined the role and responsibility of the designated person. This initiative taken by the MCA has made significant steps towards emphasizing the significance of transparency and regulatory compliance within the corporate sector.