SIGNIFICANT BENEFICIAL OWNERSHIP RULES AMENDED (India)

Author: Rashmi Grover

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Publisher: Nagashima Ohno & Tsunematsu

Journal / Book: NO&T Asia Legal Review No.11 (May, 2019)

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*Please note that this newsletter is for informational purposes only and does not constitute legal advice. In addition, it is based on information as of its date of publication and does not reflect information after such date. In particular, please also note that preliminary reports in this newsletter may differ from current interpretations and practice depending on the nature of the report.

Background
On 14 June 2018, the Ministry of Corporate Affairs (“MCA”) had introduced the Companies (Significant Beneficial Owners) Rules, 2018 (“SBO Rules”) requiring the ultimate owners of beneficial interest in Indian companies to disclose such interest. NO&T’s Asia Legal Review No. 3 had covered the scope of the SBO Rules in detail. The SBO Rules were ambiguous and unclear on several issues including the scope of disclosure, disclosure requirements in case of structures with multiple levels of intermediate corporate shareholding etc. Based on representations from various stakeholders, compliance requirements under the SBO Rules were suspended pending further clarifications/amendments from the MCA.

Finally, on 8 February 2019, the MCA released the Companies (Significant Beneficial Owners) Amendment Rules, 2019 (“New SBO Rules”) to revise and significantly amend the SBO Rules. The New SBO Rules have once again kick-started the process of requiring significant beneficial owners to report and disclose their interests.

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