Ministry of Corporate Affairs’ new notification regarding compliance related to Significant Beneficial Ownership (SBO)

Ministry of Corporate Affairs (“MCA”) vide its notification dated October 27, 2023, has amended the existing Companies (Management and Administration) Rules, 2014 by notifying Companies (Management and Administration) Second Amendment Rules, 2023.

By virtue of the above amendment, MCA has mandated every company to designate a person who shall be responsible for furnishing, and extending co-operation, for providing, information to the Registrar of Companies (“ROC”) or any other authorized officer with respect to beneficial interest in shares of the company

Brief explanation of provision related to reporting of details of SBO

As per the Section 90 of the Companies Act, 2013, every individual, who acting alone or together, or through one or more persons or trust, including a trust and person’s resident outside India, holds beneficial interests, of not less than 10%, in shares of a company or the right to exercise, or the actual exercising of significant influence or control over the company, shall make a declaration to the company in e-form BEN-1, specifying the nature of his interest and other particulars. Thereafter, the reporting company shall file a return in form BEN-2 with the Registrar giving details of significant beneficial owners of the company and changes therein, if any. This filing is made to disclose the details of Ultimate Shareholders of the Company who are holding shares through Body Corporate shareholders

New Notification

Every company shall designate a person who shall be responsible for furnishing, and extending co-operation, for providing, information to the Registrar of Companies (“ROC”) or any other authorised officer with respect to beneficial interest in shares of the company. For this purpose, the company may designate:

(i) a company secretary, if there is a requirement of appointment of such company secretary under the Act and the rules made thereunder; or

(ii) a key managerial personnel, other than the company secretary; or

(iii) every director, if there is no company secretary or key managerial personnel.

Further, the name of the designated person has to be disclosed in the Annual return of the Company and any change in the designated person has to be intimated to Registrar of Companies through filing of e-Form GNL-2.

The notification can be accessed at the below link

https://www.mca.gov.in/bin/dms/getdocument?mds=lVo7Nz8E9SMEBo5r07okJw%253D%253D&type=open