Section 6A of IA : Section 6A: Requirements As To Capital Structure And Voting Rights And Maintenance Of Registers Beneficial Owners Of Shares

Explanation using Example

Example Application of Section 6A of The Insurance Act, 1938:

Imagine a company called "SafeLife Insurance Ltd." which is a public company limited by shares and has its registered office in India. The company intends to carry on life insurance business. To comply with Section 6A of The Insurance Act, 1938, SafeLife Insurance Ltd. must ensure that:

• Its capital is made up of equity shares with a single face value, and any other form of capital as specified by regulations.
• The voting rights are exclusive to equity shareholders.
• All shares, existing or new, have the same paid-up amount, barring any grace period for payment of calls on shares.

Furthermore, if an investor named Mr. John wants to transfer more than 5% of the paid-up capital of SafeLife Insurance Ltd. to another party, he must obtain prior approval from the Authority as required by the Act. Additionally, SafeLife Insurance Ltd. must maintain a register of beneficial owners, separate from its members' register, detailing the name, occupation, and address of the true owners of its shares.