You are currently viewing Significant Beneficial Owner and Declaration

Significant Beneficial Owner and Declaration


Significant Beneficial Owner and Declaration

Every individual, who subsequently becomes a significant beneficial owner, or where his significant beneficial ownership undergoes any change shall file a declaration in Form No. BEN-1 to the reporting company, within thirty days of acquiring such significant beneficial ownership or any change therein.
Section 89 of the Act requires a person, whose name is entered in the register of members of a company as a shareholder but who doesn’t hold beneficial interest in shares of beneficial interest, to make a declaration to the company registration specifying the name

A person is considered as a Significant Beneficial Owner (SBO) if he/she, whether acting alone, together or through one or more individuals or trust holds a beneficial interest of at least 10% (25% previously). As per the amended Section 90 of the Companies Act, 2013 (‘Act’), SBO is referred as-

“Every individual, who acting alone or together, or through one or more persons or trust, including a trust and person’s resident outside India, holds beneficial interests, of not less than ten per cent. 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 of the Act.
As per the definition provided in the Act, the government is empowered to prescribe other holding percentage even for the determination of the SBO. Accordingly, the revised Rules provides the following definition as –
“Significant Beneficial Owner in relation to a reporting company means an individual are the ones who possesses one or more of the following rights or entitlements in such company, namely: –

  • 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 right to receive or participate in not less than 10%of the total distributable dividend, or any other distribution, in a financial year through indirect holdings alone, or together with any direct holdings;
  • Has right to exercise or actually exercises, directly or indirectly, significant influence or control, in any manner other than through direct holdings alone.

Declaration of the SBO – In case of ownership

A company is required to enter the following particulars of the beneficial owner in the register – the full name; the birth certificate number; the national identity number and the passport number; the nationality; the date of birth; the postal address; the business address; the residential address; telephone number. The process of declaration of SBO is as follows

  1. The individual has to file ownership using Form No BEN-1 with 30 days of acquiring such ownership.
  2. Once receiving the declaration, the company file a return using Form No Ben-2 with the registrar within 30 days.
  3. Form No Ben-3 is the Register of Beneficial owner holding Significant Beneficial Interest held by the company and made available for inspection during business hours that varies from company to company however, the amount should not exceed Rs. 50,000/-.
  4. Form No Ben-4 is a notice given by the Company requiring the individual to furnish details of his beneficial interest.

Penalties in case of non-declaration:

Individual – Fine over 1 lakh up to 10 lakhs or imprisonment for up to one year
Company – Fine over 10 lakhs up to 50 lakhs
False information furnished will be penalized under Section 447 – Punishment for Fraud.
To know more about Significant Beneficial Owner and Declaration, request a call back from Kanakkupillai NOW!
The Kanakkupillai team will be more than happy to receive your thoughts on the above read. Leave a reply below or write into us at
                                                           Until Then “Keep Reading & keep Trending”  🙂


Kanakkupillai is your reliable partner for every step of your business journey in India. We offer reasonable and expert assistance to ensure legal compliance, covering business registration, tax compliance, accounting and bookkeeping, and intellectual property protection. Let us help you navigate the complex legal and regulatory requirements so you can focus on growing your business. Contact us today to learn more.