Comment on the following statements : Investments held by a company shall be held only in the name of Company.

The above statement is not fully true, as the law does provide an exception to this general rule. Subject to certain exceptions, Section 187 of the Companies Act, 2013 mandates, all investments made or held by a company in any property, security or other asset shall be made and held by it in its own name. However, there is an exception to this rule company may hold any shares in its subsidiary company in the name of any nominee or nominees of the company, if it is necessary to do so, to ensure that the number of members of the subsidiary company is not reduced below the statutory limit. Further, if company holds shares in dematerialised form, the name of depository is entered in the register of members as member of the company and the name of the investing company as the beneficial owner of the said shares. Where the shares of a company were registered in the joint names of the company and one of its directors, it was held that the director was a nominee of the company for that purpose and could only act jointly as he had no rights of his own. [Exchange Travel (Holdings) Ltd. Re, (1991) BCLC 728 (Ch D)]. Hence, normally investments will be held in companies' name but it is not compulsory. In the above situations it may be held in other names too.