Question

Where a share of a company is held in depository form, the _________ is the prima facie evidence of the interest of the beneficial owner.

• A. Articles of association
• B. Record of the depository
• C. Minutes of the relevant board meeting
• D. Physical share certificate

Hint:

In physical shareholding, the Share Certificate is the primary evidence of title.
In demat form, the "Statement of Holding" or record of the depository is the conclusive evidence.

Answer 1

The Correct Option is B

Step 1: Understanding the Question:
The question asks what constitutes prima facie evidence of the title and interest of a beneficial owner when shares are held in a dematerialized (depository) form.

Step 2: Detailed Explanation:

• Section 46 of the Companies Act, 2013: While a physical share certificate is prima facie evidence of the title of a member to shares held in physical form, different rules apply to dematerialized shares.

• Depository System: Under the Depositories Act, 1996, and Section 46(3) of the Companies Act, 2013, when shares are held in dematerialized form, no physical share certificates are issued.
The depository (like NSDL or CDSL) acts as the registered owner, while the actual investor is the beneficial owner.

• Prima Facie Evidence: The register or records maintained by the depository (Record of the depository) serves as the prima facie evidence of the interest and ownership of the beneficial owner.

Step 3: Final Answer:
The record of the depository (Option B) is the correct answer.