What Is the Register of Members? Section 88

The register of members under the Companies Act is the company's own record of who owns it. Section 88 requires it, together with two sibling registers, and section 94 governs where it is kept and who may look at it. In a market where most shares sit in demat form, the section that matters most is the one that treats the depository's register of beneficial owners as the company's register.

The three registers section 88 requires

Section 88(1) requires every company to keep and maintain three registers, in such form and manner as may be prescribed:

• (a) a register of members, indicating separately for each class of equity and preference shares held by each member residing in or outside India
• (b) a register of debenture-holders
• (c) a register of any other security holders

Section 88(2) adds a requirement that applies to all three: every register maintained under sub-section (1) shall include an index of the names included in it.

Section 88(4) allows a company, if so authorised by its articles, to keep in any country outside India, in the prescribed manner, a part of the register referred to in sub-section (1), called a foreign register, containing the names and particulars of the members, debenture-holders, other security holders or beneficial owners residing outside India.

The depository deeming rule

Section 88(3) is the provision that makes the whole chapter work in a dematerialised market. The register and index of beneficial owners maintained by a depository under section 11 of the Depositories Act, 1996 shall be deemed to be the corresponding register and index for the purposes of the Companies Act.

In other words, for shares held in demat form, the depository's beneficial owner record is the company's register of members as a matter of law, rather than a substitute the company relies on informally. That is why a listed company's ownership picture is assembled from depository data.

What is a beneficial owner in a depository covers the depository side of that record, and what is dematerialisation of shares covers how holdings get there in the first place.

Where the register is kept

Section 94(1) sets the default: the registers required to be kept and maintained under section 88, and copies of the annual return filed under section 92, shall be kept at the registered office of the company.

The first proviso allows them to be kept at any other place in India in which more than one-tenth of the total number of members entered in the register of members reside, if approved by a special resolution passed at a general meeting. The words "and the Registrar has been given a copy of the proposed special resolution in advance" were omitted by Act 1 of 2018, section 25, with effect from 13 June 2018, so the advance filing of the draft resolution is no longer part of the condition.

The second proviso leaves the retention period to be prescribed: the period for which the registers, returns and records are required to be kept shall be such as may be prescribed.

The inspection right, and its one limit

Section 94(2) is the right that makes the register useful to a shareholder. The registers and their indices, except when they are closed under the provisions of the Act, and the copies of all the returns, shall be open for inspection during business hours by:

Section 94(3) goes further than looking. Any such member, debenture-holder, other security holder, beneficial owner or other person may (a) take extracts from any register, index or return without payment of any fee, or (b) require a copy of any such register, entries in it, or return, on payment of the prescribed fee.

A proviso inserted by Act 1 of 2018, section 25, with effect from 13 June 2018 carves out a category: such particulars of the register or index or return as may be prescribed shall not be available for inspection under sub-section (2), or for taking extracts or copies under sub-section (3). The particulars themselves sit in the rules, not the section.

Section 94(4) is the sanction for refusal. If any inspection, extract or copy required under the section is refused, the company and every officer in default shall be liable, for each such default, to a penalty of one thousand rupees for every day during which the refusal or default continues, subject to a maximum of one lakh rupees. Section 94(5) gives the Central Government power to order an immediate inspection, or direct that the extract be allowed forthwith.

What the register proves

Section 95 gives the record its evidentiary weight: the registers, their indices and copies of annual returns maintained under sections 88 and 94 shall be prima facie evidence of any matter directed or authorised to be inserted in them by or under the Act.

That is a rebuttable presumption rather than conclusive proof, but it is the reason the register is the starting point in any dispute about who holds what.

The registers that sit next to it

Section 88 is not the only ownership register in the Act, and the three are frequently confused.

Section 89 is the bridge. Where a registered holder does not hold the beneficial interest, that person declares it under section 89(1), the beneficial owner declares under section 89(2), and any change is declared within thirty days under section 89(3). Under section 89(6) the company notes the declaration in the register concerned and files a return with the Registrar within thirty days.

Section 89(8) carries the sanction that matters most to a beneficial owner who stays silent: no right in relation to any share in respect of which a declaration is required but not made shall be enforceable by him or by any person claiming through him.

Where this sits in the disclosure picture

For a listed company, the register of members is not the document an outside investor reads. The depository record behind it feeds the quarterly shareholding pattern, which is the public, structured view of the same ownership.

• How to read a shareholding pattern is the public quarterly disclosure that the register sits underneath.
• What is a beneficial owner in a depository covers the section 88(3) deeming rule from the depository side.
• What is a significant beneficial owner covers the section 90 register and the ten per cent prescribed threshold.
• What is a form MGT-7 is the annual return that section 94(1) keeps alongside these registers.

Flock reports the filings themselves, each stamped with its date and linked back to the exchange or regulator that published it. What any of it means for you is your call to make.