5[6A. Requirements as to capital structure and voting rights and maintenance of registers of beneficial owners of shares.-
6[(1) No public company limited by shares having its registered office in India, shall carry on life insurance business or general insurance business or health insurance business or re-insurance business, unless it satisfies the following conditions, namely:-
(i) that the capital of the company shall consist of equity shares each having a single face value and such other form of capital, as may be specified by the regulations;
(ii) that the voting rights of shareholders are restricted to equity shares;
(iii) that, except during any period not exceeding one year allowed by the company for payment of calls on shares, the paid-up amount is the same for all shares, whether existing or new: Provided that the conditions specified in this sub-section shall not apply to a public company which has, before the commencement of the Insurance (Amendment) Act, 1950 (47 of 1950), issued any shares other than ordinary shares each of which has a single face value or any shares, the paid-up amount whereof is not the same for all of them for a period of three years from such commencement.]
(2) Notwithstanding anything to the contrary contained in any law for the time being in force or in the memorandum or articles of association but subject to the other provisions contained in this section the voting right of every shareholder of any public company as aforesaid shall in all cases be strictly proportionate to the paid-up amount of the 1[equity] shares held by him.
3[(4) A public company as aforesaid which carries on life insurance business, general and health insurance business and re-insurance business-
(a) shall, in addition to the register of members maintained under the Companies Act, 2013 (18 of 2013), maintain a register of shares in which the name, occupation and address of the beneficial owner of each share shall be entered including any change of beneficial owner declared to it within fourteen days from the receipt of such declaration;
(b) shall not register any transfer of its shares-
(i) unless, in addition to compliance being made with the provisions of section 56 of the Companies Act, 2013 (18 of 2013), the transferee furnishes a declaration in the prescribed form as to whether he proposes to hold the shares for his own benefit or as a nominee, whether jointly or severally, on behalf of others and in the latter case giving the name, occupation and address of the beneficial owner or owners, and the extent of the beneficial interest of each;
(ii) where, after the transfer, the total paid-up holding of the transferee in the shares of the company is likely to exceed five per cent. of its paid-up capital unless the previous approval of the Authority has been obtained to the transfer;
(iii) where, the nominal value of the shares intended to be transferred by any individual, firm, group, constituents of a group, or body corporate under the same management, jointly or severally exceeds one per cent. of the paid-up equity capital of the insurer, unless the previous approval of the Authority has been obtained for the transfer. Explanation.-For the purposes of this sub-clause, the expressions "group" and "same management" shall have the meanings respectively assigned to them in the Competition Act, 2002 (12 of 2003).]
(5) Every person who has any interest in any share of a company referred to in sub-section (4) which stands in the name of another person in the register of members of the company, shall, within thirty days from the commencement of the Insurance (Amendment) Act, 1950, or from the date on which he acquires such interest, whichever is later, make a declaration in the prescribed form (which shall be countersigned by the person in whose name the shares is registered) to the company declaring his interest in such share, and notwithstanding anything contained in any other law or in any contract to the contrary, a person who fails to make a declaration as aforesaid in respect of any share shall be deemed to have no right or title whatsoever in that share:
Provided that nothing in this sub-section shall affect the right of a person who has an interest in any such share to establish in a Court his right thereto, if the person, in whose name the share is registered, refuses to countersign the declaration as required by this sub-section:
Provided further that where any share, belonging to an individual who has made any such declaration as is referred to in this sub-section is held by a company in its name in pursuance of any trust or for the purpose of safe custody or collection or realisation of dividend, such individual shall, notwithstanding anything contained in the Indian Companies Act, 1913 (7 of 1913) or in the memorandum or articles of association of the company which has issued the share, be deemed to be the holder of the said share for the purpose of exercising any voting rights under this section to the exclusion of any other person.
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6[(11) The provisions of this section, 7***, shall, on and from, the commencement of the Insurance (Amendment) Act, 1968, also apply to insurers carrying on general insurance business subject to the following modifications, namely:-
(i) that references in sub-sections (1), (3), (5) and (6) to the Insurance (Amendment) Act, 1950, shall be construed as references to the Insurance (Amendment) Act, 1968; 8***
10[Explanation]-For the purpose of this section, the holding of a person in the shares of a company shall be deemed to include-
(i) the total paid-up holding in such shares held by such person in the name of others; and
(ii) if any shares of the company are held-
(a) by a public limited company, of which such person is a member holding more than ten per cent of the paid-up capital, or
(b) by a private limited company, of which such person is a member, or
(c) by a company, of which such person is a managing director, manager, 1*** or in which he has a controlling interest, or
(d) by a firm in which such person is a partner, or
(e) by such person jointly with others, such part of the total paid-up holding of the company or firm or of the total joint holding in those shares, as is proportionate to the contribution made by such person to the paid-up capital of the company, the paid-up capital of the firm or the joint holding, as the case may be.
1. Subs. by Act 41 of 1999, s. 30 and the First Schedule, for "Controller" (w.e.f. 19-4-2000). Earlier it was substituted by Act 47
of 1950, s. 4, for "Superintendent of Insurance" (w.e.f. 1-6-1950).
2. The provisos omitted by Act 5 of 2015, s. 9 (w.e.f. 26-12-2014).
3. Sub-section (3) omitted by s. 9, ibid. (w.e.f. 26-12-2014).
4. Subs. by s. 10, ibid., for section 6 (w.e.f. 26-12-2014).
5. Ins. by Act 47 of 1950, s. 9 (w.e.f. 1-6-1950).
6. Subs. by Act 5 of 2015, s. 11, for sub-section (1) (w.e.f. 26-12-2014).
1. Ins. by Act 5 of 2015, s. 11 (w.e.f. 26-12-2014).
2. Subs-section (3) Omitted by s. 11, ibid. (w.e.f. 26-12-2014).
3. Subs. by s. 11, ibid., for sub-section (4) (w.e.f. 26-12-2014).
1. Sub-section (6) omitted by 5 of 2015, s. 11 (w.e.f. 26-12-2014).
2. Sub-section (7) omitted by s. 11, ibid. (w.e.f. 26-12-2014).
3. Sub-section (8) omitted by s. 11, ibid. (w.e.f. 26-12-2014).
4. Sub-section (9) omitted by s. 11, ibid. (w.e.f. 26-12-2014).
5. Sub-section (10) omitted by s. 11, ibid. (w.e.f. 26-12-2014).
6. Ins. by Act 62 of 1968, s. 4 (w.e.f. 1-6-1969).
7. The words, brackets and figures "except those of sub-sections (7), (8) and (9)" omitted by Act 5 of 2015, s. 11
8. The word "and" omitted by s. 11, ibid. (w.e.f. 26-12-2014).
9. Clause (ii) omitted by s. 11, ibid. (w.e.f. 26-12-2014).
10. Subs. by Act 41 of 1999, s. 30 and the First Schedule, for "Explanation 1 " (w.e.f.19-4-2000).