Section 91 of the Companies Act, 2013
Here is a complete explanation of Section 91 of the Companies Act, 2013:
📘 Section 91 – Power to Close Register of Members or Debenture-Holders or Other Security Holders
This section provides the legal basis for a company to temporarily close its register of members, debenture-holders, or other security holders, mainly for administrative purposes like finalizing dividend lists, voting rights, etc.
🔍 Key Provisions of Section 91
1. Closure of Register
A company may close the register of:
Members
Debenture-holders
Other security holders
for a specified period, by giving advance notice.
2. Notice Requirements
Minimum 7 days' prior notice (excluding the date of publication and the record date)
The notice must be published:
At least once in a vernacular newspaper in the district where the registered office is located, and
At least once in an English newspaper circulating in that district.
3. Time Limits for Closure
The register can be closed for a maximum of 45 days in any one financial year.
On any one occasion, it can be closed for not more than 30 days.
4. Applicability
Applies to:
All companies, except when specifically exempted by the Central Government.
📅 Purpose of Register Closure
Determining record date for dividends, bonuses, right issues, etc.
Finalizing the list of eligible shareholders for voting at general meetings.
Other legal or corporate compliance activities.
⚠️ Penalties for Non-Compliance
If the company fails to comply with this section:
It may be liable to penalties under the Act, particularly under Section 403 or other applicable provisions.
📝 Example
If a company wants to declare a dividend, it may close its register of members from 20th July to 25th July, giving at least 7 days' advance notice through newspapers. During this period, no transfers or changes in shareholding will be recorded.
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