{"id":1943,"date":"2022-03-07T05:14:11","date_gmt":"2022-03-07T05:14:11","guid":{"rendered":"https:\/\/www.kanakkupillai.com\/new-learn?p=1943"},"modified":"2025-06-13T15:06:33","modified_gmt":"2025-06-13T09:36:33","slug":"significant-beneficial-owner-and-declaration","status":"publish","type":"post","link":"https:\/\/www.kanakkupillai.com\/learn\/significant-beneficial-owner-and-declaration\/","title":{"rendered":"Significant Beneficial Owner and Declaration"},"content":{"rendered":"<p>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.<br \/>\nSection 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\u2019t hold beneficial interest in shares of beneficial interest, to make a declaration to the <a href=\"https:\/\/www.kanakkupillai.com\/\" target=\"_blank\" rel=\"noopener\"><span style=\"color: #0000ff;\"><strong>company registration<\/strong><\/span><\/a> specifying the name.<\/p>\n<div class=\"wDYxhc\" lang=\"en-IN\" data-md=\"61\">\n<div class=\"LGOjhe\" role=\"heading\" data-attrid=\"wa:\/description\" aria-level=\"3\" data-hveid=\"CAYQAA\"><span class=\"ILfuVd\"><span class=\"hgKElc\">A person is considered a Significant Beneficial Owner (SBO) if they, whether acting alone, together, or through one or more individuals or trusts, hold a beneficial interest of at least 10% (25% previously). <\/span><\/span>As per the amended Section 90 of the Companies Act, 2013 (\u2018Act\u2019), SBO is referred to as-<\/div>\n<\/div>\n<p><span style=\"font-weight: 400;\">\u201cEvery individual who acts alone or together, or through one or more persons or trusts, including a trust and a person 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.<\/span><br \/>\n<span style=\"font-weight: 400;\">As per the definition provided in the Act, the government is empowered to prescribe holding percentages other than the one specified for the determination of the SBO. Accordingly, the revised Rules provide the following definition \u2013<\/span><br \/>\n<span style=\"font-weight: 400;\">\u201cSignificant Beneficial Owner in relation to a reporting company means an individual who possesses one or more of the following rights or entitlements in the Company, namely: \u2013<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Holds indirectly, or together with any direct holdings, not less than 10% of the shares;<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Holds indirectly, or together with any direct holdings, not less than 10% of the voting rights in the shares;<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Has the 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;<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Has the right to exercise or actually exercises, directly or indirectly, significant influence or control, in any manner other than through direct holdings alone.<\/span><\/li>\n<\/ul>\n<h2><b>Declaration of the SBO \u2013 In case of ownership<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">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; and the telephone number. The process of declaration of SBO is as follows.<\/span><\/p>\n<ol>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The individual has to file ownership using Form No BEN-1 within 30 days of acquiring such ownership.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Once receiving the declaration, the company files a return using Form No Ben-2 with the registrar within 30 days.<\/span><\/li>\n<li style=\"font-weight: 400;\">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 vary; however, the amount should not exceed Rs. 50,000\/-.<\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Form NNo.Ben-4 is a notice given by the company, requiring the company to to provide details of the benefits to the employee.<\/span><\/li>\n<\/ol>\n<h2><b>Penalty in case of non-declaration:<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Individual \u2013 Fine over 1 lakh up to 10 lakhs or imprisonment for up to one year<\/span><br \/>\n<span style=\"font-weight: 400;\">Company \u2013 Fine over 10 lakhs up to 50 lakhs<\/span><br \/>\n<span style=\"font-weight: 400;\">False information furnished will be penalized under Section 447 \u2013 Punishment for Fraud.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Every individual who subsequently becomes a significant beneficial owner, or where his significant beneficial ownership undergoes any change, shall file a declaration&#8230;<\/p>\n","protected":false},"author":1,"featured_media":8026,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"no","_lmt_disable":"no","footnotes":""},"categories":[6],"tags":[],"class_list":{"0":"post-1943","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-companies-act"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.1 (Yoast SEO v27.5) - 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