The Tax Publishers

Register of Significant Beneficial Owners in a Company: A New Perspective

D.K. Saxena

This article enlightens the amended provision with reference to register of significant beneficial owners in a company, required compliances, both by company and person holding beneficial interest therein and several penalties imposed for non-compliance thereof.

1. Background

The provisions relating to register of significant beneficial owners have been inserted vide Companies (Amendment) Act, 2017 under section 90 of the Companies Act, 2013 by substituting earlier provision that dealt with investigation of beneficial ownership of shares in certain cases. The provisions are thus, totally revamped. After amendment of section 90, it reflects major transactions regarding significant beneficial owners, i.e., declaration by an individual for being a significant beneficial owner of any company, maintenance of register with respect thereto and manner of obtaining information regarding such other beneficial owners by the concerned companies.

2. Meaning of Significant Beneficial Owner

Where the securities are dealt with in a depository, name of beneficial holder of shares would be entered in the records of a depository. The persons holding beneficial interest in any share(s) is known to be a beneficial owner of such shares.

On reading provisions of section 90 of the Companies Act, 2013 being amended vide Companies (Amendment) Act, 2017, it can be construed that the term 'Significant Beneficial Owner' means an individual, acting alone or together, or through one or more persons or trust, including a trust and persons resident outside India, who holds beneficial interests, of not less than twenty-five per cent. or such other percentage as may be prescribed, in shares of a company or have the right to exercise, or the actual exercising of significant influence or control as defined in clause (27) of section 2, over the company.

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