In exercise of the powers conferred by Section 89 and Section 90, read with sub-section (1) of section 469, of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules, namely :-

1. Short title and commencement.–

(1) These rules may be called the Companies (Beneficial Interest and Significant Beneficial Interest) Rules, 2018.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. Definitions.-

(1) In these rules, unless the context otherwise requires,-

(a) “Act” means the Companies Act, 2013 (18 of 2013);

(b) "form" means a form annexed to these rules;

(c) “beneficial owner” means a person having beneficial interest in a share but whose name is not entered in the register of members of a company as the holder of that share;

(d) “registered owner” means a person whose name is entered in the register of members of a company as the holder of shares in that company but who does not hold the entire beneficial interest in such shares;

(e) “section” means a section of the Act

(f) “rules” means Companies (Beneficial Interest and Significant Beneficial Interest) Rules, 2017.

(2) Words and expressions used in these rules but not defined and defined in the Act or in Companies (Specification of definitions details) Rules, 2014 shall have the meanings respectively assigned to them in the Act and said Rules.

3. Declaration to company in respect of beneficial interest under section 89.-

(existing Rule 9 of chapter VII may be substituted with Rule 3 and 4)

(1) A registered owner shall file a declaration disclosing that he does not hold the entire beneficial interest in such shares in Form No. BEN-1 with the company, within thirty days from the date on which his name is entered in the register of members of such company.

(2) A beneficial owner shall file a declaration disclosing his beneficial interest in Form No. BEN-2 with the company, , within thirty days after acquiring such beneficial interest in the shares of the company.

Where any change occurs in the beneficial interest of such shares,

(3) –

(a) the registered owner shall make a declaration of such change to the company in Form No. BEN-1, in duplicate, within a period of thirty days from the date of such change; and

(b) the beneficial owner shall make a declaration of such change to the company in Form No. BEN-2, in duplicate, within a period of thirty days from the date of such change.

Proviso to Rule 9(3) to be inserted and would be applicable for both Rule 3 and 4.

4. Return of beneficial interest. under section 89-

Where any declaration under Rule 3 is received by the company, it shall –

(a) make a note of such declaration in its register of members; and

(b) file a return in Form No. BEN-3 with the Registrar in respect of such declaration, within a period of thirty days from the date of receipt of declaration by it, along with the fee.

Explanation.– The period of thirty days will start from the date on which complete declarations are received by the company.

5. Declaration of significant beneficial interest in shares under section 90.-

(1) Every individual, who acting alone or together, or through one or more persons or trust, including a trust and persons resident outside India, holds significant beneficial interests in the company , shall file a declaration in Form No. BEN-4 to the company within thirty days from the commencement of these rules. , .

(2) Every individual, who acting alone or together, or through one or more persons or trust, including a trust and persons resident outside India, acquires significant beneficial interests in the company or any change therein shall file a declaration in Form No. BEN-4 to the company, within thirty days of acquiring such significant beneficial interest or any change therein.

‘any change’ may be clearly quantified.

6. Return of significant beneficial interest in shares.-

Where any declaration under rule 5 is received by the company, it shall file a return in Form No. BEN-5 with the Registrar in respect of such declaration, within a period of thirty days from the date of receipt of declaration by it, along with the fee....register and fee rules.

7. Register of significant beneficial owners.-

(1) The company shall maintain a register of beneficial owners holding significant beneficial interest in Form No. BEN-6.

(2) The register shall be open to inspection open for inspection during business hours, at such reasonable time of not less than two hours, on every working day as the board may decide, by any member of the company on payment of such fee as may be specified by the company but not exceeding fifty rupees for each inspection.

8. Exception to significant beneficial ownership

Rules 5, 6 and 7 shall not apply where the registered owner is a body corporate whose equity shares are listed on any stock exchange or is a wholly-owned subsidiary of such body corporate.

(Foreign listed companies should also be exempted.)

9. Notice seeking information about significant beneficial owners.-

A company shall give notice seeking information under sub-section (5) of section 90, in Form No. BEN-7.

10. Application to the Tribunal.-

The company may apply to the Tribunal under sub-section (7) of section 90, for order directing that the shares in question be subject to restrictions, including –

(a) restrictions on the transfer of interest in the shares in question;

(b) suspension of the right to receive dividend in relation to the shares in question;

(c) suspension of voting rights in relation to the shares in question;

(d) any other restriction on all or any of the rights attached with the shares in question.

 

Beneficial ownership rules require declarations, company registers and Tribunal-backed restrictions for unidentified significant beneficial owners. The draft Rules require declarations by registered owners (Form BEN-1) and beneficial owners (Form BEN-2) within thirty days of registration or acquisition, company filing of returns (Form BEN-3) and maintenance of a register and returns for significant beneficial owners (Forms BEN-4, BEN-5, BEN-6). Companies must issue prescribed notices (Form BEN-7) to ascertain SBOs; recipients must respond within thirty days or the company may apply to the Tribunal for restrictions on the shares, including transfer, dividend and voting suspensions. The Rules include specified forms, inspection and fee provisions, limited exemptions and incorporate an amendment broadening the concept of beneficial interest and prescribing penalties for non-compliance.