# Beneficial Interest in Shares [Section 89]
## Concept
Beneficial interest in a share includes (directly or indirectly) a person's right or entitlement to:
- Exercise rights attached to such shares, or
- Receive dividend or other distribution from such shares.
In other words, the registered owner may not always be the beneficial owner — the person actually entitled to economic benefits.
## Three Declarations Required
| By Whom | Form | Trigger | Time Limit |
|---|---|---|---|
| Registered owner (whose name is in register but who is NOT beneficial owner) | MGT-4 | Entry of his name in register | Within 30 days of entry |
| Person acquiring beneficial interest (true owner) | MGT-5 | Acquisition of beneficial interest | Within 30 days of acquisition |
| Either, in case of change in beneficial interest | — | Change in beneficial interest | Within 30 days of change |
## Company's Obligation
- Company shall note the declaration in its concerned register.
- Company shall file return of declaration in Form MGT-6 with ROC within 30 days of receipt of declaration.
## Designated Person
- Company shall designate a person — Company Secretary, KMP (other than CS), or every director (if no CS/KMP) — to furnish information of beneficial interest to ROC.
- Details of designated person are to be reported in Annual Return.
- Any change in designated person must be intimated to ROC.
## Consequence of Non-Declaration by Beneficial Owner
Rights attaching to such shares shall not be enforceable by any person.
## Penalties
| Defaulter | Penalty |
|---|---|
| Person failing to make declaration | ₹50,000 + ₹200/day after first day of default (max ₹5 lakhs) |
| Company failing to file return | ₹1,000/day during failure (max ₹5 lakhs for company; ₹2 lakhs for officer in default) |
## Important Notes
- Company's obligation to pay dividend to members is not affected in any case.
- Section is not applicable to Government Company (if no default u/s 92 & 137) and any other person exempted by CG.