Accounting Equation

Significant Beneficial Owner (SBO)

Every person who has a significant stake in the company must declare their interest, as well as other details of theirs, to the company. The company will then maintain the register, which will be told only to the ROC (Registrar of the Company).

Now the important question is who is significant Beneficial Owner?

If a person possesses one or more of the following rights or entitlements in the company, they are the Significant Beneficial Owner:

  • Holds 10% or more (Indirect + Direct) of “Shares”
  • Holds 10% or more (Indirect + Direct) of “Voting rights in the shares”
  • Holds “significant influence or control” in any manner other than through direct holdings alone.

If an Individual does not hold any Indirect right. He/she will not be considered as SBO.

Further, If the member of the reporting company is also a body corporate then the individual holding:

  • holds the majority of shares in that member
  • holds majority stake in the ultimate holding company

shall be consider as SBO of the reporting entity.

Failure to declare inform ROC and maintain the register in the prescribed format will invite penalties

Statutory Requirement

BEN-1Declaration by the SBO to the company
BEN-2Form to be filed by Company with the ROC
BEN-3Register of SBO to be maintained by company
BEN-4Notice shall be given by the company to members seeking details of SBO

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