Section 72 of CA 2013 : Section 72: Power To Nominate

Explanation using Example

Imagine an individual, Ravi, who has purchased shares of XYZ Limited. He wants to ensure that if something happens to him, his shares will go to his daughter, Priya. Ravi can use Section 72(1) of the Companies Act, 2013, to nominate Priya as the person who will receive his shares upon his death. He simply needs to fill out the prescribed nomination form provided by the company.

Now consider a married couple, Aarav and Meera, who jointly own shares in ABC Corporation. They can use Section 72(2) to jointly nominate their son, Arjun, so that if both Aarav and Meera were to pass away, Arjun would inherit the rights to their shares in the company.

According to Section 72(3), if Ravi had also mentioned in his will that his shares should go to his friend, Vikram, upon his death, the nomination he made for Priya would take precedence. This means Priya would become the owner of the shares, excluding Vikram and anyone else Ravi might have named in his will or other legal documents.

Lastly, if Priya were a minor when Ravi made the nomination, Section 72(4) allows Ravi to appoint someone, say his brother Anil, to hold the shares on Priya’s behalf until she comes of age. This ensures that the shares are managed by a responsible adult until Priya is capable of managing them herself.