MCA has vide its notification dated 13th June, 2018 notified the Companies (Significant Beneficial Owners), Rules, 2018. The salient features of these Rules are as under:
Companies (Significant Beneficial Owners) Rules, 20l8
In exercise of the powers conferred by Section 90 read with sub-section (l) of section 469 of the Companies Act, 2013, the Central Government hereby makes the following rules, namely: Significant Beneficial Ownership:
Significant Beneficial Owner means an individual holding ultimate beneficial interest of not less than 10% in a company. The definition in the Rules gives reference to section 90(1) of the Act which is more elaborate. The said section 90(1) refers to an individual, acting alone or together, or through one or persons or trusts (including persons or trusts resident outside India) and holds beneficial interest in the shares of a company or the right to exercise or the actual exercising of significant influence or control (control as defined in section 2(27). Control as defined in section 2(27) shall include the right to appoint majority of directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in any other manner.
Further the definition in the Rules also refers to section 89(10) of the Act. Now section 89(10) says beneficial interest includes, directly or indirectly through any contract, arrangement or otherwise, the right or entitlement of a person alone or together with any person to (i) exercise or cause to be exercised any or all of the rights attached to such shares, or (ii) receive or participate in any dividend or other distribution in respect of such share. Further in the definition of Significant Beneficial Ownership, as per the Rules above, in case of persons other than individuals or natural persons shall be determined as under:
(i) where the member is a company, the significant beneficial owner is the natural person,who, whether acting alone or together with other natural persons, or through one or more other persons or trusts, holds not less than ten per cent. share capital of the company or who exercises significant influence or control in the company through other means;
(ii) where the member is a partnership firm, the significant beneficial owner is the natural person, who, whether acting alone or together with other natural persons, or through one or more other persons or trusts, holds not less than ten per cent. of capital or has entitlement of not less than ten per cent. of profits of the partnership;
(iii) where no natural person is identified under (i) or [ii), the significant beneficial owner is the relevant natural person who holds the position of senior managing official;
(iv) where the member is a trust (through trustee), the identification of beneficial owner(s) shall include identification of the author of the trust, the trustee, the beneficiaries with not less than ten per cent. interest in the trust and any other natural person exercising ultimate effective control over the trust through a chain of control or ownership;
Global Depository Receipts, Compulsorily Convertible preference shares or compulsorily convertible debentures shall be treated as “shares” for the purpose of this Rules. Declaration of significant beneficial ownership in shares under section 90
Every significant beneficial owner shall file a declaration in Form No. BEN-I to the Company in which he holds the significant beneficial ownership on the date of commencement of these rules within ninety days from such commencement and within thirty days in case of any change in his significant beneficial ownership Return of significant beneficial owners in shares
Where any declaration under is received by the company, it shall file a return in Form No. BEN-2 with the Registrar in respect of such declaration, within a period of thirty days from the date of receipt of declaration by it, along with the fees as prescribed in companies (Registration offices and fees) Rules, 2014.Register of significant beneficial owners
The company shall maintain a register of significant beneficial owners in Form No. BEN-3. The register shall be open for inspection during business hours, at such reasonable time of not less than two hours, on every workingday as the board may decide, by any memberof the company on payment of such fee as may be specified by the company but not exceeding fifty rupeesfor each inspection.
Notice seeking information about significant beneficial owners
A company shall give notice seeking information in accordance with under sub-section (5) of section 90, in Form No. BEN-4.
Application to the Tribunal
The company may apply to the Tribunal in accordance with sub-section (7) of section 90, for order directing that the shares in question be subject to restrictions, including -
o restrictions on the transfer of interest attached to the shares in question;
o suspension of the right to receive dividend in relation to the shares in question;
o suspension of voting rights in relation to the shares in question;
o any other restriction on all or any of the rights attached with the shares in question.
Non-Applicability
These rules are not made applicable to the holding of shares of companies/body corporates, in case of pooled investment vehicles/investment funds such as Mutual Funds, Alterative Investment Funds (AIFs), Real Estate Investment Trusts(REI'rs) and Infrastructure Investment Trusts (lnv ITs) regulated under SEBI Act.
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