The Ministry of Corporate Affairs has issued the Companies (Significant Beneficial Ownership) Amendment Rules, 2019 (Amendment Rules) to amend the provisions of the Companies (Significant Beneficial Ownership) Rules, 2018 (Principal Rules ).
The Amendment Rules seek to identify the natural persons who are the owners of a company. Additionally, the Amendment Rules have also brought in clarity in respect of the compliances to be undertaken by individuals and companies vi z - à -vi z significant beneficial ownership held in a company.
This update highlights the amendments brought about by the Amendment Rules.
The Amendment Rules have introduced the following new definitions:
definition of an SBO has been amended by the Amendment Rules as
Amendment Rules specifically provide that no individual will be an
SBO only by holding direct stake in a company. Accordingly, if an
individual does not have an indirect holding in a company, such
individual shall not be considered as an SBO.
The Amendment Rules provide that an individual will be considered to hold a right or an entitlement directly in the reporting company, if the following criteria are met:
The Amendment Rules provide that an individual will be considered to hold a right or entitlement indirectly in the reporting company:
The following are excluded from the applicability of the Amendment Rules: