To curb the menace of black money and round tripping of funds, the Ministry has introduced many measures to send a strong message to the existing companies. One of the initial steps by the MCA was to strike off Companies which have not been filing their financial statements for a period of 2 or more years. In this measure more than 200,000 companies were struck off and a proposed 31250 (approx) companies are also liable to be struck off.
A recent measure taken by the MCA in this regard is to get information about the ultimate individual beneficial shareholder of a company. The Ministry in this regard had redrafted the provisions of Section 90 of the Companies Act 2013 and notified it on 13th June, 2018. Through this notification a step has been taken by the Ministry to reveal legitimate individual owner hiding behind anonymity and layers of shell Companies.
The amended provision governing “Significant Beneficial Owner” (section 90) herein after referred to as “SBO” under the Companies Act, 2013 (hereinafter referred to as “ACT”) has been made effective from 13.06.2018 and major highlights of these provisions have been enumerated below.
Who is Significant Beneficial Owner (SBO) ?
Any person (singly or along with other person including trust and person’s resident outside India) shall become SBO with respect to shares in a company if:
|Condition 1||AND||Condition 2|
|Any 1 condition of the following:
||I. Whose name is not entered in the register of members as a shareholder of the company.|
Individuals (natural person) fulfilling the conditions specified above are termed as “SBO” of the Company. In cases where member of the company is not a natural person, the significant beneficial holder shall be:
If there is no natural person meeting above conditions, the SBO is the relevant natural person who holds the position of senior managing official.
Compliance required on part of “SBO”
The Compliances required on part SBO have been enumerated below:
Compliance required on part of “Company”:
The Compliances required on part of Company have been enumerated below:
From the above, it can be concluded that these stringent additions in the provisions of the Law are to find out about the actual owners having significant influence in Companies or having Control under the entities registered under the law by lifting of veil on such shareholding”.