Beneficial Ownership Requirements: A New Era for Indian Companies

Introduction

In a move aimed at enhancing transparency and accountability, the Ministry of Corporate Affairs (MCA) has issued a notification requiring every company in India to designate a person responsible for furnishing information on beneficial ownership. This development is part of a broader effort by the MCA to ensure strict compliance with provisions related to Significant Beneficial Ownership (SBO).

Key Changes and Requirements

• Indian companies must determine if there is an individual who can be classified as an SBO
• A notice needs to be issued by the company to its shareholders in the prescribed Form BEN-4
• The company will then need to file a return in the prescribed Form BEN-2 with the Registrar of Companies (RoC) within 30 days of receipt of the duly filled and signed Form BEN-1 from the SBO

What is Significant Beneficial Ownership?

Significant beneficial ownership refers to an individual who, acting alone or together with others, possesses one or more of the following rights or entitlements in a company:

• Holds 10% or more shares, indirectly or together with direct holdings
• Holds 10% or more voting rights in the shares, indirectly or together with direct holdings
• Has the right to receive or participate in not less than 10% of the total distributable dividend, or any other distribution, in a fiscal year, through indirect holding alone or together with direct holdings

How Can We Help?

Computershare Governance Services is available to guide companies through the process of determining SBO and ongoing advisory oversight. Our leading entity management system GEMS can also help manage and store beneficial ownership information on a global basis.

For more information about how Computershare may assist in responding to these new requirements, please contact your dedicated Computershare Relationship Manager or email globalentityservices@computershare.com