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Companies Act

Overview of the significant beneficial ownership rules

July 8, 2019 by Team Instabizfilings

Overview of the significant beneficial ownership rules

Significant Beneficial Ownership Rules, 2019

 

Any individual who alone or together,

  • holds indirectly, or together with any direct holdings, not less than ten per cent. of the shares;
  • holds indirectly, or together with any direct holdings, not less than ten per cent. of the voting rights in the shares;
  •  has right to receive or participate in not less than ten per cent. 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, significant influence or control, in any manner other than through direct holdings alone:

 

SBO shall be individual depending upon the following type of members of Reporting Company (RC)

 

  • If Member of RC is Company --> Individual holding majority stake (i.e. more than 50%) in such Company OR Individual holds majority stake in ultimate holding Company
  • If Member of RC is HUF --> Karta of HUF
  •  If Member of RC is Partnership Entity (LLP) --> Individual who is a Partner OR Individual holds majority stake in Body Corporate who is Partner of Partnership Entity OR Individual holds majority stake in ultimate holding company of such Body Corporate
  • If Member of RC is Trust --> Trustee in case of discretionary trust or charitable trust OR Beneficiary in case of specific trust OR Author or Settlor in case of revocable trust
  • If Member of RC is Pooled Investment Vehicle --> General Partner OR Investment Manager OR CEO where Body corporate is the Investment manager of such pooled investment vehicle

 

Click here for illustrations

 

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