Use the declaration route for the actual split in rights
Companies Act section 89 addresses shares entered in one person's name where another person holds the beneficial interest. The registered holder and the person holding or acquiring the beneficial interest have separate declaration duties. Section 89(10) includes direct or indirect rights or entitlements to exercise share rights or receive or participate in dividends or other distributions. The analysis turns on the rights in the shares, not merely the name of a group company.
Read the applicable text: Companies Act, 2013, sections 89 and 90 MCA legacy MGT-6 instruction kit (background; see 2024 form below) MCA committee explanation of existing Rule 9 declaration mechanics.
Identify the declarants and the company obligation
Rule 9 of the Companies (Management and Administration) Rules, 2014 provides Form MGT-4 for the registered owner who does not hold the beneficial interest and Form MGT-5 for the beneficial owner. The initial declaration periods run separately: generally 30 days from entry of the registered owner in the register and 30 days after acquiring the beneficial interest, respectively. If the beneficial interest changes, section 89(3) and Rule 9 require both the registered holder and the beneficial owner to submit their change declarations to the company within 30 days from the change. Use actual event and submission dates.
Calendar receipt and the Registrar return separately
Under section 89(6) and Rule 9(3), the company notes the declaration in the register of members and files MGT-6 with the Registrar, with the prescribed fee, within 30 days of receipt under the general rule. Track the period separately for each declaration and do not delay filing on the assumption that the later receipt restarts the earlier period. The examples use the ordinary company rules; check the section 462 notifications for government companies and specified IFSC companies, and the Rule 9 exception for specified fund trusts. Preserve both declarations where applicable, reconciliation and filing evidence. A company should distinguish the legally effective change, holder signature, receipt and filing dates.
Reconcile affected shares and rights precisely
Check class, folio or depository identifiers, number of shares and rights against the register and instruments. Record the legal holder and beneficial holder separately for the same securities; do not add the two populations to issued capital. Distinguish an actual change of beneficial interest from correcting erroneous particulars and assess the appropriate response without backdating.
Keep related regimes separate
Section 90 significant beneficial ownership and the annual return have their own rules. Neither replaces a section 89 declaration where it is required. Under section 89(8), if the beneficial owner fails to make a required declaration for a share, the beneficial owner and anyone claiming through that owner cannot enforce rights in relation to the share. Section 89(9) preserves the company’s dividend obligation to its members and discharges it when it pays them. Escalate missing or inconsistent evidence rather than assuming another public record cures the omission.
Six worked illustrations
All facts and amounts are fictional. Calculations illustrate the stated assumptions, not a predetermined legal outcome.
Illustrative example 1: Separate initial clocks
A registered owner's name is entered on 3 August 2026; the beneficial interest is acquired on 6 August. Illustrative 30-day markers are 2 September and 5 September respectively, before any separate calendar issue.
Illustrative example 2: Company receipt is later
An MGT-4 signed 4 September reaches the company on 8 September. The 30-day receipt-based marker is 8 October. Counting from signature instead would give 4 October.
Illustrative example 3: Do not duplicate the shares
A nominee is registered for 1,200 shares, with the same 1,200 shares beneficially held by another person. The matched declaration population is 1,200, not 2,400.
Illustrative example 4: Match a part change
Of a 5,000-share population, 1,600 shares change beneficial holder and 3,400 remain with the same beneficial holder. The changed population is 32% of the original block.
Illustrative example 5: Two dated receipts
A company receives the registered holder declaration on 5 October and the other declaration on 12 October. The 30-day calendar markers are 4 November and 11 November respectively. Log both and do not ignore the earlier receipt.
Illustrative example 6: Resolve a mismatch
MGT-4 shows 900 shares and MGT-5 shows 850 for the matched folio. Fifty shares remain unresolved. Confirm the source instruments before treating them as the same population.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Extract the affected share records | Register, class and folio evidence |
| 2 | Identify the registered party | Legal holder record |
| 3 | Identify the beneficial rights | Agreement and distribution or voting rights |
| 4 | Determine the relevant event date | Entry, acquisition or change evidence |
| 5 | Obtain the holder declarations | Signed MGT-4 and MGT-5 as applicable |
| 6 | Log actual company receipt | Dated acknowledgment and tracking |
| 7 | Reconcile units and rights | Matched holder and share schedule |
| 8 | Update the register note | Declaration cross-reference |
| 9 | Verify the Registrar return | MGT-6 and filing evidence |
| 10 | Check related regimes separately | Section 90 and other reporting review |
Sixteen practitioner FAQs
1. Does section 89 apply only above a percentage threshold?
The split in the shares' registered and beneficial interests is the relevant issue under section 89.
2. Who submits MGT-4?
The registered owner who does not hold the beneficial interest.
3. Who submits MGT-5?
The person holding or acquiring the beneficial interest in the stated circumstances.
4. Who files MGT-6?
The company files the prescribed return with the Registrar.
5. Does signing start the company's clock?
The company tracks actual receipt of the declaration.
6. Do changes require a new review?
Yes. Assess section 89(3) and the change declaration requirements.
7. Can mismatched share numbers be treated as equal?
Reconcile the discrepancy against the register and instruments.
8. Is the registered holder removed simply by filing MGT-6?
Record the declaration appropriately; assess any transfer separately.
9. Can annual return disclosure replace MGT-6?
It does not replace the separate section 89 process.
10. Does section 90 use the same test?
No. Check significant beneficial ownership separately.
11. Can indirect rights be relevant?
Section 89(10) includes direct or indirect rights of the specified nature.
12. Should the company wait for both forms before logging receipt?
No. Record each declaration when received and apply its own receipt-based deadline.
13. Do voting and distribution rights both matter?
Both can be relevant to beneficial interest.
14. Does a declaration create additional issued shares?
No. Do not count both descriptions as separate securities.
15. Can a missing declaration affect enforcement?
Yes. Section 89(8) bars enforcement of rights in relation to the affected share by the defaulting beneficial owner or a person claiming through that owner.
16. What does the reviewer need?
The declarations, dates, legal records, register note and filing acknowledgment.
Official sources
Companies Act, 2013, sections 89 and 90 MCA legacy MGT-6 instruction kit (background; see 2024 form below) MCA committee explanation of existing Rule 9 declaration mechanics
ICSI section 89 and notified variations
MCA notification for specified IFSC public companies, 4 January 2017
ICSI consolidated Rule 9, including prescribed forms and amendments
MCA 2024 amendment substituting Form MGT-6 from 15 July 2024