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Corporate Laws Corporate Governance Committee The Institute of Chartered Accountants of India ANNOUNCEMENT Sub: Sensitization of Companies to abide the provisions of Section 90 of the Companies Act, 2013 read with Rules thereunder relating to Significant Beneficial Ownership This is with reference to the initiative of the Ministry of Corporate Affairs (MCA) to create wider awareness of provisions relating to Significant Beneficial Ownership provided in the section 90 of the Companies A
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FAQ :
The announcement aims to create wider awareness and ensure companies comply with the provisions of Section 90 of the Companies Act, 2013, and related rules regarding Significant Beneficial Ownership.
An individual is considered a Significant Beneficial Owner if they hold, directly or indirectly, not less than ten percent of the shares, voting rights, or right to dividends/distributions, or exercise significant influence or control over a company.
A Significant Beneficial Owner must file a declaration in e-form BEN-1 within 90 days of the rules' commencement or 30 days of acquiring or changing their significant beneficial ownership.
Companies must maintain a register of significant beneficial owners (e-form BEN-3) and file a return (e-form BEN-2) with the Registrar within 30 days of receiving a declaration, and take steps to identify such owners.
Failure to make a declaration can result in a penalty of ₹50,000 and a further ₹1,000 daily for continuing failure, up to ₹2 lakh. Companies can face penalties of up to ₹5 lakh, and officers up to ₹1 lakh for non-compliance with register and filing requirements.
If a person fails to provide required information or provides unsatisfactory details, the company can apply to the Tribunal within 15 days for an order restricting rights attached to the shares, such as transfer or voting rights.
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