A. Applicable Sections: Section 90 read with section 89(10) of the Companies Act 2013
B. Applicable Rules: Rule 2 to 8 of The Companies (Significant Beneficial Owners) Rules, 2018
1. Applicability of Companies (Significant Beneficial Owners) Rules, 2018
Who is a Significant Beneficial Owner (SBO)?
Ans: As per Section 90(1) – Every individual, who acting alone or together, or through one or more persons or trust, including a trust and persons resident outside India, holds beneficial interests, of not less than 25% or such other percentage as may be prescribed, in shares of a company or the right to exercise, or the actual exercising of significant influence or control as defined in clause (27) of section 2, over the company.
As per Rule 2(e)- “significant beneficial owner” means an individual referred to in sub-section (1) of section 90 (holding ultimate beneficial interest of not less than 10%) read with sub-section  of section 89, but whose name is not entered in the register of members of a company as the holder of such shares, and the term ‘significant beneficial ownership’ shall be construed accordingly.
For the purpose of significant beneficial ownership, in case of persons other than individuals or natural persons, shall be determined as under-
(i) where the member is a company- SBO will be the natural person (shareholder of the company) holds not less than 10% share capital of the company or who exercises significant influence or control in the company through other means;
(“significant influence” means control of at least 20% of total voting power, or control of or participation in business decisions under an agreement; and
“control” shall include the right to appoint majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in any other manner.)
(ii) where the member is a partnership firm- SBO will be the natural person (partners of the firm), who, holds not less than 10% of capital or has entitlement of not less than 10% of profits of the partnership;
(iii) where no natural person is identified under (i) or (ii), the significant beneficial owner is the relevant natural person who holds the position of senior managing official;
(iv) where the member is a trust (through trustee), the identification of beneficial owner(s) shall include identification of the author of the trust, the trustee, the beneficiaries with not less than 10% interest in the trust and any other natural person exercising ultimate effective control over the trust through a chain of control or ownership;
2. Instruments in the form of global depository receipts, compulsorily convertible preference shares or compulsorily convertible debentures shall be treated as shares’ for the purpose of this clause.
a. Every SBO shall file a declaration in Form No. BEN-I to the company in which he holds the significant beneficial ownership within 90 days from such commencement and within thirty days in case of any change and every individual on acquiring significant beneficial ownership.
b. Where any declaration in Form BEN-I is received by the company, it shall file a return in Form No. BEN-2 with the Registrar within 30 days from such receipt.
c. The company shall maintain a register of significant beneficial owners in Form No. BEN-3.
d. If a company knows or has reasonable cause to believe—
(a) to be a significant beneficial owner of the company;
(b) to be having knowledge of the identity of a significant beneficial owner or another person likely to have such knowledge; or
(c) to have been a significant beneficial owner of the company at any time during the three years immediately preceding the date on which the notice is issued, and who is not registered as a significant beneficial owner with the company as required under this section,
It shall give notice seeking information within 30 days in Form No. BEN-4
e. If the person fails to provide information within 30 days or the information is not satisfactory, then the company within 15 days apply to Tribunal for an order directing that the shares in question be subject to restrictions.
f. If any person fails to make a declaration in BEN-1, he shall be punishable with fine which shall not be less than 100000 but which may extend to Rs. 1000000 and where the failure is a continuing one, with a further fine which may extend to Rs. 1000 for every day after the first during which the failure continues.
g. If a company, required to maintain register in Form BEN-3 and file the information in Form BEN-3, fails to do so or denies inspection as provided therein, the company and every officer of the company who is in default shall be punishable with fine which shall not be less than 1000000 but which may extend to Rs. 5000000 and where the failure is a continuing one, with a further fine which may extend to Rs. 1000 for every day after the first during which the failure continues.
h. If any person wilfully furnishes any false or incorrect information or suppresses any material information of which he is aware in the declaration made under this section, he shall be liable to action under section 447.
4. NON-APPLICABILITY: These rules are not made applicable to the holding of shares of companies/body corporates, in case of pooled investment vehicles/investment funds such as Mutual Funds, Alterative Investment Funds (AIFs), Real Estate Investment Trusts(REITs) and Infrastructure Investment Trusts (lnvlTs) regulated under SEBI Act.