Register the nomination without promising an inheritance outcome
Section 72 of the Companies Act, 2013 permits nomination of company securities. For holdings processed through the company’s register under Rule 19 of the Companies (Share Capital and Debentures) Rules, 2014, use SH-13 for nomination and SH-14 for cancellation or variation. All joint holders must act together. A nominee’s entitlement following death must not be advertised as an automatic defeat of every will or legal heir’s claim.
Scope: company-register processing, not a universal demat form guide
This workflow addresses eligible unlisted-company securities for which nomination is lawfully maintained and acted on through the company register, including physical holdings where permitted. First establish whether compulsory dematerialisation or a depository process applies. Listed securities, demat accounts, bank deposits and mutual-fund units can involve different current operational rules; do not send every investor to these company forms without classifying the holding. Section 72’s statutory text provides the nomination framework, while Rule 19 reproduced in ICSI’s legal e-book supplies the company-register procedure.
Receipt, recording and change are separate controls
Rule 19 requires a corresponding entry forthwith in the relevant securities-holder register on receipt of the nomination form. It also requires the request to be recorded within two months of receiving a duly filled and signed form. Treat the immediate entry and two-month outer period as separate compliance checks; the latter is not a reason to leave complete requests unattended. The official SH-13 form copy identifies nature of securities, folio, number, certificate and distinctive numbers, nominee details and signatures. Reconcile those details to the actual holding rather than accepting a name-only letter.
A cancellation or variation in SH-14 takes effect from the company’s receipt of the notice under Rule 19(10). Keep the earlier nomination and a dated change history rather than erasing the original evidence. A board-entry date after receipt should not silently replace the rule’s effective date. For joint holdings, the nominee route arises on death of all joint holders, not merely because the first holder dies. Rule 19 and section 72 also contain provisions for a minor nominee; use the prescribed particulars and appointment provisions rather than treating a minor’s signature as an adult instruction.
Transmission and meeting rights
Following the relevant death, Rule 19 permits the nominee, on the required evidence, to elect registration as holder or transfer as the deceased holder could have done. An election to be registered must be signed and accompanied by the relevant death certificate. Applicable transfer restrictions remain relevant. The nominee may have the specified dividend, interest and other advantages, but cannot exercise membership rights relating to meetings before registration. The Board may require an election by notice; after ninety days of non-compliance it may withhold the specified distributions until compliance. This is a withholding power, not an automatic forfeiture of the securities.
Read the succession judgment before drafting assurances
In Shakti Yezdani & Anr. v. Jayanand Jayant Salgaonkar & Ors., 2023 INSC 1076, decided 14 December 2023, the Supreme Court considered nomination under the 1956 Act and the Depositories Act, referring to the corresponding 2013 Act provisions. Paragraphs 42–44 explain that nomination is not a separate statutory testament and does not give the nominee absolute title overriding succession law. The practical distinction is between efficient company transmission and ultimate beneficial entitlement. Identify court orders and genuine competing claims; a registrar’s internal nomination entry is not a court’s adjudication of inheritance.
Six worked illustrations
All facts and amounts below are fictional. Assumptions describe the model, not additional statutory rules.
Illustrative example 1: Two months is not sixty days
A complete signed SH-13 arrives on 6 August 2026. The same-date two-month control date is 6 October 2026, a span of sixty-one calendar days. Make the required prompt register entry and complete processing within the rule’s period; using an assumed sixty-day substitute changes the calendar calculation.
Illustrative example 2: Incomplete joint instruction
Three joint holders own 3,600 shares. A nomination signed by only two leaves one required holder’s instruction missing. Their shares are jointly held; do not treat two signatures as nominating an independently transferable 2,400-share portion. Obtain the joint instruction required by the rule.
Illustrative example 3: Folio reconciliation
A holder has 2,000 shares in folio A and 750 in folio B. An SH-13 schedule correctly covers A but identifies only 700 shares in B. The register comparison is 2,750 held versus 2,700 scheduled, leaving fifty shares needing clarification. Do not presume that a vague nomination automatically resolves the discrepancy.
Illustrative example 4: Receipt date controls variation
A valid SH-14 reaches the company on 24 September 2026 and is entered internally on 28 September. The four-day processing interval does not move the Rule 19(10) effective receipt date to 28 September. Preserve both dates and the superseded nominee record.
Illustrative example 5: Distribution versus voting
Assume a nominee validly becomes entitled after the sole holder’s death, registration remains pending and a dividend of ₹2.50 per share is otherwise payable on 4,000 shares. The distribution working is ₹10,000. That economic entitlement does not itself give the nominee 4,000 meeting votes before registration as holder.
Illustrative example 6: Ninety-day election notice
For a model in which the notice’s ninety-day period runs from the day after 1 August 2026, day ninety is 30 October 2026. If the notice remains uncomplied with, the Board’s later withholding power must be considered on those facts. A proposed ₹12,000 distribution withheld under that power remains a compliance item; it does not convert into ₹12,000 of company income or a forfeiture merely because payment is withheld.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Classify the holding | Confirm company-register, physical-permitted or depository route before choosing forms. |
| 2 | Reconcile securities | Match folio, quantity, certificate and distinctive-number particulars. |
| 3 | Verify the holders | Identify the sole holder or every joint holder and required signatures. |
| 4 | Check nominee particulars | Use SH-13 and complete applicable minor-nominee details. |
| 5 | Record receipt | Preserve the dated complete form and delivery evidence. |
| 6 | Update the register | Make the corresponding entry forthwith and monitor the two-month requirement. |
| 7 | Control later changes | Record SH-14 receipt, effective date and prior nomination history. |
| 8 | Verify the death trigger | Obtain relevant evidence, including all joint holders where applicable. |
| 9 | Process the election | Retain signed election, death certificates and any transfer restrictions. |
| 10 | Separate succession issues | Check disputes, court directions and beneficial-entitlement questions independently. |
Sixteen practitioner FAQs
1. Which form records a company nomination?
SH-13 is the nomination form under Rule 19 for the company-register route addressed here.
2. Which form cancels or changes it?
SH-14 gives the prescribed cancellation or variation notice.
3. Can one joint holder nominate alone?
Rule 19 requires all joint holders to nominate together; a first-holder signature alone is not the joint instruction.
4. Does the first joint holder’s death trigger the nominee route?
Section 72 and Rule 19 refer to death of all joint holders for the joint-holding nomination trigger.
5. How quickly must the register be updated?
Rule 19 calls for a corresponding entry forthwith and recording the request within two months of a duly completed signed form.
6. Is two months always sixty days?
No. Calendar months can span a different number of days; calculate and document the actual dates.
7. When does SH-14 variation become effective?
Rule 19(10) uses receipt of the cancellation or variation notice by the company.
8. Can the old nomination simply be deleted?
Preserve an audit history showing what was superseded, when the new notice arrived and which instruction now operates.
9. Does SH-13 replace a will?
No. The Supreme Court’s Shakti Yezdani ruling rejects nomination as a separate testament overriding succession law.
10. Can a nominee choose transfer rather than registration?
Rule 19 permits that election, subject to evidence and the applicable transfer restrictions.
11. What accompanies an election to register?
A signed written election and the relevant death certificate are expressly required by Rule 19(6).
12. Can an unregistered nominee vote at meetings?
Rule 19 withholds the membership rights relating to company meetings before registration as holder.
13. Are dividends treated the same way as meeting votes?
No. Rule 19 separately recognises the specified economic advantages, subject to its election-notice withholding provision.
14. What does the ninety-day notice do?
If not complied with, it permits the Board thereafter to withhold the specified distributions until compliance. It is not automatic share forfeiture.
15. Are these forms a complete demat nomination guide?
No. Establish the current depository and securities-regulatory route before applying a company-register procedure.
16. Should a company decide every inheritance contest itself?
No. Separate transmission administration from disputed beneficial ownership and act consistently with applicable succession law and court directions.
Conclusion
For eligible company-register holdings, reconcile SH-13 nominations and SH-14 changes with Rule 19. Nomination supports transmission but does not confer absolute ownership against succession rights.