Who needs to disclose?

Every individual, who is acting alone or together, or through one or more persons or trust, possesses one or more of the following rights or entitlements in a reporting company shall be deemed to be a significant beneficial owner (SBO):

• holds indirectly, or together with any direct holdings, not less than 10% of the shares;
• holds indirectly, or together with any direct holdings, not less than 10% of the voting rights in the shares;
• has the right to receive or participate (by virtue of their indirect and/or direct holdings) in not less than 10% of the total distributable dividend or any other distribution; or
• has the right to exercise, or actually exercises, significant influence or control (through their indirect holdings only) over the reporting company.

Filing obligation under new SBO Rules

• Every SBO is required to make a declaration in Form No. BEN-1 to the company in which he/she holds the significant beneficial ownership within 90 days of the New SBO Rules coming into effect and every time any individual acquires significant beneficial ownership in a reporting company, the declaration in Form BEN-1 has to be filed within 30 days of acquiring such significant beneficial ownership.
• Once a declaration by an SBO is received by the reporting company, the reporting company is required to, within 30 days of receiving such declaration, file a return in Form No. BEN-2 with the relevant registrar of companies in respect of each such declaration received by the reporting company.
• Each company is required to maintain a register of SBO’s in Form No. BEN-3 which shall be available for inspection to the shareholders.
• In addition, every reporting company, will be required to give notice in Form No. BEN-4 to all its members (who are not individuals) who hold more than 10% of the shares asking the members to, inter alia, disclose information of the SBO of the member.
• In case no declaration is filed by the SBOs to the reporting company or where the information provided by the SBOs is deemed unsatisfactory by the reporting company, the reporting company is entitled to apply to the NCLT for imposing restrictions on the shares held by the SBOs.

Non-applicability of the New SBO Rules

The following persons are exempt from making disclosures under the New SBO Rules

• The Investor Education and Protection Fund;
• The holding reporting company of the reporting company;
• The Central Government, State Government or any local authority;
• Any entity controlled by the Central Government or by any State Government or Governments or partly by the Central Government and partly by one or more State Governments;
• All investment vehicles registered with the Securities and Exchange Board of India (SEBI);
• Investment vehicles regulated by the Reserve Bank of India or Insurance Regulatory and Development Authority of India or Pension Fund Regulatory and Development Authority..

Table V- Statement showing details of significant beneficial owners (SBOs)

Disclaimer:"The information contained herein is only for informational purpose and should not be considered for any particular instance or individual or entity. We have obtained information from publicly available sources, there can be no guarantee that such information is accurate as of the date it is received or it will continue to be accurate in future. No one should act on such information without obtaining professional advice after thorough examination of particular situation."