Companies (Significant Beneficial Owners) Amendment Rules, 2019 was notified by MCA vide Notification Dated 8th February 2019 which are Subject to Provisions of Section 90 of Companies Act, 2013 and Section 469(1),(2) Companies Act, 2013.
Article explains the following-
- Meaning of Significant Beneficial Owner (SBO)
- Who will be SBO in various Cases?
- Duty of the Reporting Company
- Declaration of Significant Beneficial Ownership
- Format of Form BEN-1
- Format of Form BEN-4
- Return of significant beneficial owners in shares
- Non Applicability of SBO Rules.
Companies (Significant Beneficial Owners) Amendment Rules, 2019.
*Note-For the purpose of this clause, if an individual does not hold any right or entitlement indirectly under sub-clauses (i), (ii) or (iii), he shall not be considered to be a significant beneficial owner.
Who will be SBO in various Cases?
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Explanation – Where an individual becomes a significant beneficial owner, or where his significant beneficial Ownership undergoes any change, within ninety days of the commencement of the Companies (Significant Beneficial Owners) Amendment Rules, 2019, it shall be deemed that such individual became the significant beneficial owner or any change therein happened on the date of expiry of ninety days from the date of commencement of said rules, and the period of thirty days for filing will be reckoned accordingly.
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Mr. X holds 88% shares in C Ltd. which holds 73% shares in B Ltd. which holds 17% in A Ltd. (Reporting Company). So Mr. X is SBO of A Ltd. ? correct? but what should be the shareholding to be written in Form BEN-1 of Mr.X in A Ltd.?
SIr, my reporting company has Company as shareholder with 99%non voting rights. say co A, now this Company A has 2 individual shareholders holding 50% shares in A Ltd.
These 2 shareholders are also holding 0.5% each in reporting Company directly,
Am I right in interperatrating that since No majority holder in A ltd (50% each ) so No SBO reporting by the reporting Company. pl. confirm,
For example: There is a A Ltd who required to file BEN-2 (Reporting Company) and in A ltd a Body Corporate (B Ltd) hold let say 10% and in B Ltd a body corporate (C Ltd) hold 55% i.e Ultimate Holding Company and in C ltd an Individual Mr. X hold majority stake i.e more than 50% let say 60% then in such case, Will Mr. X will be the Significant Beneficial owner in A Ltd?
QUERY:-
My doubt is we know that in above example there is a indirect holding by Mr. X in A ltd, but the condition of HOLDING INDIRECTLY NOT LESS THAN 10% is fulfilled?
As in above case if we multiply the shareholding that Mr.X is indirectly holding then we get 3.3% (60% x 55% x 10%). (Mr. X’s shareholding in C ltd x C ltd holding in B ltd x B ltd holding in A ltd)
Please correct me if Im wrong because Im facing this issue.
Thank you,
1. Mr. A holds 90% shares in a Company and Mr. A HUF holds 5% shares and other members hold 5%.
a)Since HUF itself does not hold 10%, do we need to ascertain SBO or b)do we need to check both direct and indirect holding of Mr. A along with Mr. A HUF. In such a case, the total holding is 95%.
2. ABC limited is a shareholder of a reporting company. Mr. A holds 2% shares in the company and XYZ Limited holds 8% shares . Mr A hold 90% shares in XYZ Limited.
a)Since XYZ itself does not hold 10% shares in the company, do we still have to find SBO.b) Do we have to consider direct and indirect holding here ie 2% +8% and then find SBO.
We are facing some problem while filing BEN 2. Please kindly reply to the query as soon as possible:
One of our company is having a body corporate as its member and then that member company is again having a body corporate as its member which is holding the majority stake. So now who will beconsidered as the SBO in this case.
Very nice and detailed capture. Kudos!