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Microlesson · 5-min read

Nomination by Depositor (Rule 11)

# Nomination by Depositor (Rule 11)

## Rule

Every depositor may nominate any person at any time.

## Effect of Nomination

On the death of the depositor, the deposit shall vest in the nominee.

## Key Features

  • Voluntary — the word 'may' makes it optional, not mandatory.
  • At any time — nomination is not restricted to the time of making the deposit.
  • Any person — no restriction on who can be nominated (subject to general law).

## Practical Significance

  • Avoids succession/probate hassles for the company and the heirs.
  • The nominee becomes the rightful recipient on death (subject to legal heir claims under personal law).

Worked example

### Example 1

Example: Mr. P deposits Rs. 10 lakh with ABC Ltd. on 1-Apr-2024 without nominating anyone. On 1-Jan-2025, he nominates his son. P dies on 1-Jun-2025. The deposit vests in his son (the nominee), not directly in legal heirs through succession.

⚠️ Common exam mistakes

  • Treating nomination as mandatory — Rule 11 uses 'may', so it is optional.
  • Believing nomination can only be made at the time of deposit — it can be made at any time.
Bare-Act text Rule 11, Companies (Acceptance of Deposits) Rules, 2014 · Companies Act, 2013 · click to expand
Every depositor may nominate any person at any time. The nominee shall be the person to whom his deposits shall vest in the event of his death.
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