Section 90 of the Companies Amendment Act, 2017 has replaced the provision relating to Significant Beneficial Owners to remove the difficulties on regulatory authorities to verify the identity of individuals who ultimately owned and controlled the company.
The Companies (Significant Beneficial Owners) Rules 2018 has also been notified and came into effect from 14th June, 2018.
Now the First Question which arises is that who is a Significant Beneficial Owner?
As Defined in 2 (e) of The Companies (Significant Beneficial Owners) Rules 2018 “significant beneficial owner” means an individual referred to in sub-section (1) of section 90 (holding ultimate beneficial interest of not less than ten per cent.) 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;
An explanation is also given with the above definition for the persons other than individuals and natural persons:
1. Where the member is Company
The significant beneficial owner is the natural person, who, whether acting alone or together with other natural persons, or through one or more other persons or trusts, holds not less than ten per cent. share capital of the company or who exercises significant influence or control in the company through other means;
2. Where the member is a partnership firm
The significant beneficial owner is the natural person, who, whether acting alone or together with other natural persons, or through one or more other persons or trusts, holds not less than ten per cent. of capital or has entitlement of not less than ten per cent. of profits of the partnership;
3. Where no natural person is identified
The significant beneficial owner is the relevant natural person who holds the position of senior managing official;
4. 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 ten per cent. interest in the trust and any other natural person exercising ultimate effective control over the trust through a chain of control or ownership;
Now in what time and in which form the Declaration has to be filed for the significant beneficial ownership?
As per Rule 3 of the Companies (Significant Beneficial Owner) Rules, 2018 the declaration has to be filed to the Company in form BEN- 1 by every significant beneficial owner within 90 days of commencement of these rules i.e. 14th June, 2018 and within 30 days of change in significant beneficial ownership (includes acquiring such significant beneficial ownership).
The Declaration received by the Company has to be filed by the Company in Form No. BEN – 2 within a period of thirty days from the date of receipt of declaration and the Company has to maintain maintain a register of significant beneficial owners in Form No. BEN-3 which shall be open for inspection during business hours, at such reasonable time of not less than two hours, on every working day as the board may decide, by any member of the company.
Notice to be given by the Company
As per sub section 5 of the Section 90 of Companies Act, 2013 where the company knows or has reasonable cause to believe for any person (whether or not a member of the company)
- to be a significant beneficial owner of the company;
- to be having knowledge of the identity of a significant beneficial owner or another person likely to have such knowledge; or
- 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.
The Company shall give notice in Form BEN- 4 to give the correct information about the significant beneficial ownership and the information shall be given by the concerned person within 30 days.
Where the person fails to provide the information within prescribed time or the information is not satisfactory, the Company shall apply to the tribunal within a period of 15 days of the expiry of period specified in the notice for an order directing that the shares in question be subject to restrictions with regard to transfer of interest, suspension of all rights attached to the shares and such other matters as may be prescribed and the Tribunal may, after giving an opportunity of being heard to the parties concerned, make such order restricting the rights attached with the shares within a period of sixty days of receipt of application or such other period as may be prescribed. FAQs on Companies (Significant Beneficial Owners) Rules, 2018