Is there any provision in the Company's Act preventing the companys from making the registration of immovable property in other's name other than Company itself ?
11 June 2011
There is no specific provision. But, company has to own the assets in its own name or else payment made for the same shall be a payment to the person in whose name the asset is registered
12 June 2011
Companies Act, no where provide /permit to own any property in the name other then the company except in section 49 which deals with investment in shares. The section provid for prohibition of holding investment in shares in the name othere then compamy with certain statutory exceptions. Hance i agreed with Mr. Suresh which also answared for your further query. "els the payment .............is registered" i.e. The name will be appered as debtor of the company.
10 August 2024
The provisions under the Companies Act and the Benami Transactions (Prohibition) Act address the registration and ownership of immovable property by companies. Here’s a detailed overview:
### **1. Provisions Under the Companies Act**
**Registration of Immovable Property:** - **Companies Act, 2013:** There is no explicit provision in the Companies Act, 2013, that directly prevents a company from registering immovable property in the name of individuals other than the company itself. However, the Act requires that the company’s records, including those related to property ownership, must be maintained accurately and reflect the true ownership of assets.
- **Company’s Property:** Typically, a company’s property should be registered in its own name to maintain clear and undisputed ownership. Registering property in someone else's name could lead to issues related to control, ownership rights, and asset protection.
- **Fiduciary Duties:** Directors and officers of a company have fiduciary duties to act in the best interests of the company. Registering property in the name of individuals rather than the company may be considered a breach of these duties if it is done to circumvent legal requirements or for personal gain.
**Benami Transactions:** - **Benami Transactions Act:** The Benami Transactions (Prohibition) Act, 1988, prohibits benami transactions and provides for the confiscation of benami property. A benami transaction is one where the property is held by one person on behalf of another, or where the property is registered in the name of someone other than the actual owner.
- **Application to Companies:** The Act applies to all transactions where property is held in a name other than the true owner. This means that if a company registers property in the name of an individual or entity that is not the true owner or beneficial owner, the transaction could be considered a benami transaction. The Act targets such transactions to prevent concealment of assets and evasion of taxes.
**Key Points:** - **Disclosure:** If a company is found to be engaging in benami transactions, it could face legal consequences, including confiscation of property and penalties.
- **Compliance:** Companies must ensure that all property transactions are transparent and properly documented to avoid any issues under the Benami Transactions Act. This includes accurately reflecting property ownership in company records and public documents.
### **3. Practical Considerations**
**Legal Compliance:** - **Property Registration:** To avoid complications, it is advisable for companies to register immovable property directly in the company’s name. This helps in maintaining clear ownership records and avoids potential legal issues.
- **Review Transactions:** Companies should review and ensure compliance with relevant laws and regulations, including the Companies Act and the Benami Transactions Act, to avoid issues related to property ownership and registration.
**Conclusion:** - **No Direct Prohibition:** The Companies Act does not specifically prohibit registering property in someone else’s name, but this practice is generally discouraged. - **Benami Act:** The Benami Transactions Act can apply if property is held in a name other than the true owner, which could include companies if they engage in such transactions.
For specific legal advice, particularly regarding complex property transactions and compliance with relevant laws, consulting with a legal expert or corporate advisor is recommended.
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