Due dates and Actionable under SBO Framework

This concept of “Significant Beneficial Owner” (“SBO”) was introduced under Companies Act, 2013 under Section 90 vide an amendment last year with effect from 13th June 2018 and the Companies (Significant Beneficial Ownership) Rules, 2018 (“SBO Rules”) thereunder were issued.

MCA had amended the SBO Rules vide a Notification dated 8th February 2019 wherein the detailed framework and actionable on the part of SBO was given as follows:-

Responsibility	Actionable	Rule	Due Date
Significant Beneficial Owner (Individual SBO)	To file Declaration in Form BEN -1 (physical form) with Company, as on date of commencement of Amended SBO Rules (position as on 8th February 2019)	Rule 3(1)	Within 90 days from 8th February 2019, i.e., on or before 9th May 2019
	To file Declaration in Form BEN -1 with Company, whenever there is any change in significant beneficial interest	Rule 3(2)	Within 30 days from the change
	Note – for changes in significant beneficial interest during the period between 8th February 2019 to 9th May 2019 – additional timeline provided	Explanation to Rule 3(2)	Within 30 days after 9th May 2019, i.e., on or before 8th June 2019
Reporting Company	Filing of BEN 1 received from SBO with MCA in BEN-2 (e-form)	Rule 4	Within 30 days from receipt of BEN 1 from SBO Due date Extended to 30th September 2019
	Note – Due date for filing BEN 2 with MCA for declaration in BEN 1 received from SBO for declaring the position as on 8th February 2019 has been extended to 30th September 2019
	Maintaining Register of Significant Beneficial Owners as per format given in Form BEN 3	Rule 5	At all times, and shall be open for inspection during business hours by any member of Company
	Giving of notice to members (other than individuals) who hold not less than 10% of shares or voting rights or right to receive or participate in the dividend or any other distribution payable in a financial year – in Form BEN 4 [for seeking declaration from SBO]	Rule 6	No timeline prescribed, but within reasonable timeframe after due date of receipt of BEN 1, i.e., after 9th May 2019

It must be noted that though the due date for filing BEN 2 has been extended to 30th September 2019, there was no extension in timeline for giving initial BEN 1 by the SBOs (which was till 9th May 2019) and BEN 1 for any change till 9th May 2019 (which was till 8th June 2019). Hence, the obligation on Companies to maintain Register in SBO 3 format has already begun and any member can demand inspection of the same…..

Date of newsletter:- 30th July 2019