## Significant Beneficial Owner (Section 90)
### 1. Who is an SBO?
An individual who, acting alone/together or through one or more persons (including trusts), possesses any one of the following rights/entitlements in the reporting company:
- Directly or indirectly holds ≥ 10% of shares, or
- Directly or indirectly holds ≥ 10% of voting rights (VR), or
- Directly or indirectly has the right to receive/participate in ≥ 10% of total dividend (or distributable dividend) in a financial year, or
- Exercises significant influence or control in any manner other than through direct holding (e.g., power to participate in policy-making decisions).
### 2. Declaration by SBO
| Step | Form | Timeline |
|---|---|---|
| SBO declares nature of his interest to Company | Form BEN-1 | Within 30 days of becoming SBO |
| Company files Return of SBO with RoC | Form BEN-2 | Within 30 days of receiving BEN-1 |
| Company maintains Register of SBO | Form BEN-3 | — |
The Register of SBO (BEN-3) shall be open for inspection by any member during business hours (AOA may restrict but must allow minimum 2 hours) on payment of prescribed fees.
### 3. Onus on the Reporting Company
The company shall issue a Notice in Form BEN-4 to any person whom the company:
- Has Reason to Believe (RGTB) to be an SBO, or
- Knows is/was an SBO, or
- Was an SBO during the last 3 years.
The person must reply within 30 days.
### 4. Application to Tribunal
If the person:
- Fails to reply, or
- Reply is unsatisfactory,
the Company may apply to the Tribunal within 15 days. After giving Opportunity of Being Heard (OOBH), the Tribunal may pass an order within 60 days for:
- Transfer of interest — restricting
- Restriction on rights (dividend, voting, etc.)
- O Other suspension
### 5. Relaxation & Transfer to IEPF
- The company or aggrieved person may apply to the Tribunal within 1 year for relaxation of restrictions.
- If no application is made within 1 year, such shares shall be transferred to IEPF.
### 6. Penalty
| Default | Penalty |
|---|---|
| Failure to file BEN-1 (SBO) | ₹50,000 + ₹1,000/day, Max ₹2,00,000 |
| Failure to file BEN-3 (Register) / BEN-2 / Inspection refused | Company & officer in default: ₹1 lakh + ₹500/day, Max ₹5 lakh (Co.) / ₹2 lakh (Officer) |
| Wilful false/incorrect info | Liable under Section 447 (Fraud) |
### 7. Non-Applicability of SBO Rules
SBO rules do NOT apply where shares are held by:
- IEPF Authority (Sec 125)
- Holding Company of the reporting company (details must be reported)
- CG, SG, Local Authority or entity controlled by CG/SG
- SEBI-registered Investment Vehicles: Mutual Fund, AIF, REIT, InvIT
- Investment vehicles regulated by RBI, IRDA, or Pension Fund Authority