Section 59 of the Companies Act, 2013
Section 59 of the Companies Act, 2013 – Rectification of Register of Members
Key Provisions:
Wrongful Entry/Removal in Register:
If the name of a person is wrongly entered or omitted in the register of members of a company, or there is any default or unnecessary delay in entering their name, the person aggrieved, or a member of the company, or the company itself can apply to the Tribunal (i.e., NCLT – National Company Law Tribunal).
Application to Tribunal:
The Tribunal, after being satisfied with the facts, may direct the rectification of the register of members.
Compensation for Loss/Damage:
If it is proved that the entry or omission was made without sufficient cause or fraudulently, the company is liable to pay damages to the aggrieved party.
Listed Companies:
In case of listed companies, the power to rectify the register of members due to mistakes of a depository (for securities in demat form) lies with the Securities and Exchange Board of India (SEBI), not the Tribunal.
Example Scenario:
If a shareholder’s name is removed from the company’s records without valid reason, they can approach NCLT under Section 59 to get their name reinstated and also seek compensation for any loss they may have suffered due to this wrongful act.
RELATED Blog
0 comments