# Register of Significant Beneficial Owners (SBO) — Section 90

Section 90 targets the ultimate human owner behind complex corporate structures, especially shell companies and benami arrangements.

## Who is a Significant Beneficial Owner?

Every individual in relation to a reporting company, who acting alone or together, or through one or more persons or trust (including a trust and non-resident), holds:

Beneficial interest of not less than 10% in shares of the company, OR
Right to exercise / actual exercise of significant influence or control over the company.

> Note: Only an individual can be an SBO — never a company or LLP.

## Compliance Framework

Step	Action	Form	Timeline
1	SBO files declaration to reporting company	BEN-1	Within 30 days of acquiring/changing SBO status
2	Company files return with ROC	BEN-2	Within 30 days of receipt of declaration
3	Company maintains Register of SBOs	BEN-3	Ongoing
4	Company can issue notice to any person it knows/believes to be SBO	BEN-4	—

## Consequences of Non-Compliance

If a person fails to give information called for by company under BEN-4, the company may apply to NCLT (Tribunal) within 15 days for an order directing:

Restriction on transfer of shares
Suspension of voting rights
Suspension of dividend payment
Any other restriction

## Penalty

For SBO failing to declare: Imprisonment up to 1 year, or fine ₹1 lakh to ₹10 lakh, or both + ₹1,000 per day continuing default.
For company failing to maintain register / file return: Fine ₹10 lakh to ₹50 lakh + ₹1,000 per day continuing default.

Worked example

### Example 1

Example: Mr. X holds 8% shares directly in A Ltd and another 5% indirectly through Y Pvt Ltd (in which X holds 60%). Is X an SBO of A Ltd? Solution: X's indirect holding via Y is 5% × (60%/100%) — but the test is whether X together with his direct holding crosses 10%. Combined attributable interest = 8% direct + 5% indirect = 13%. Yes, X is an SBO and must file BEN-1.

### Example 2

Example — Form Chain: SBO Mr. P files BEN-1 with PQR Ltd on 10 April 2026. Solution: PQR Ltd must file BEN-2 with ROC within 30 days, i.e., by 10 May 2026. The interest declared must be entered in BEN-3 register maintained by the company.

⚠️ Common exam mistakes

Treating a body corporate as an SBO — only individuals qualify.
Confusing Section 89 (registered vs. beneficial owner) with Section 90 (ultimate beneficial owner ≥10%) — both can apply simultaneously.
Forgetting the 15-day NCLT application window under BEN-4 non-compliance.

Bare-Act text Section 90 · The Companies Act, 2013 · click to expand

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 beneficial interests, of not less than twenty-five per cent. or such other percentage as may be prescribed, in shares of a company or the right to exercise, or the actual exercising of significant influence or control as defined in clause (27) of section 2, over the company (herein referred to as 'significant beneficial owner'), shall make a declaration to the company, specifying the nature of his interest and other particulars, in such manner and within such period of acquisition of the beneficial interest or rights and any change thereof, as may be prescribed.

Now that you've read this — what's next?

Move from understanding → mastery in 3 clicks. Each option below picks up from this lesson's topic.

🔥 Drill 5 Qs on this → ✍️ Adaptive practice →

Significant Beneficial Owners (Section 90)

Worked example

⚠️ Common exam mistakes