Please explain the meaning of Benificial Ownership of Shares in context of Sec.270 Qualification of Shares...???
3 Replies
Srikanth M S
(finalist)
(88 Points)
Replied 20 April 2012
Dear friend,
Section . 270 of the Act: it shall be the duty of every director who is required by the articles of the company to hold a specified share qualification and who is not already qualified iii that respect, to obtain his qualification within two months after his appointment as director.
(2) Any provision in the articles of the company (whether made before or after the commencement of this Act) shall be void in so far as it requires a person to hold the qualification shares before his appointment. as a director or to obtain them within a shorter time than two months after his appointment as such.
(3) The nominal value of the qualification shares shall not exceed five thousand rupees, or the nominal value of one share where it exceeds five thousand rupees.
(4) For the purpose of any provision in the articles requiring a director to hold a specified shall qualification, the bearer of a share warrant shall not be deemed to be the holder of the shares specified in the warrant
This section no where specifies the Requirement of Benefitial Ownership as u specified.. However in normal sense The term Benefitial Ownership means holding atleast 10% of shares..
Regards...
Srikanth
CA Deepesh Ruhela
(Keen to Learn)
(3271 Points)
Replied 20 April 2012
Dear Srikanth,
thanks for reply...but i do not agree with you because i got the appropriate (in my opinion) meaning of Benificial ownership. Benificial ownership means you have no tittle of share but still you have all powers such as voting power, investment power etc. Benificial owner a person who enjoys the benefits of ownership even though title is in another name.
Regards
Deepesh
Srikanth M S
(finalist)
(88 Points)
Replied 23 April 2012
Dear Deepesh,
Thanks for the Inputs.. Can i know where exactly you got the details regarding this. Can you share me the link or any sectional reference? Cuz i told on the basis of s. 2(22)(e) of The Income Tax Act, 1961, ehich speaks about the BENEFITIAL OWNERSHIP
Regards
Srikanth.
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