GUIDANCE NOTE ON SIGNIFICANT BENEFICIAL OWNERSHIP

MCA has replaced Significant Beneficial Rules 2018 and come up with  Companies (Significant Beneficial Ownership) Amendment Rules, 2019 on 08.02.2019 in order to curtail the misuse of various multi layered entities and protect various benami & money laundering Transactions.

If the registered shareholder is not the beneficial shareholder of the company then the registered and beneficial shareholder is required to make a declaration with the Company and the Company in turn shall file a return to Registrar of Companies. Provision of Section 90 of Companies act 2013 along with rules will apply.

Significant Beneficial Owner(SBO)

A person is considered as Significant Beneficial Owner if he is acting alone or together with more persons or trust holds a beneficial interest of 10% or more, (earlier it was 25%).

The Amended Companies (Significant Beneficial Owners) Amendment Rules, 2019 describes Significant beneficial owner” means an individual referred, who acting

a)     alone or together, or

b)     through one or more persons or

c)     trust,

d)     possesses one or more of the following rights or entitlements in such reporting company, namely:-

                                     i.   holds indirectly, or together with any direct holdings, not less than ten percent of the shares;

                                   ii.          holds indirectly, or together with any direct holdings, not less than ten per cent of the voting rights in the shares;

                                 iii.          has right to receive or participate in not less than ten per cent. of the total distributable dividend, or any other distribution, in a financial year through indirect holdings alone, or together with any direct holdings;

                                 iv.          has right to exercise, or actually exercises, significant influence or control, in any manner other than through direct holdings alone:

WHEN DOES THE INDIVIDUAL CONSIDERS AS HOLDING RIGHT OR ENTITLEMENT IN THE COMPANY?

An individual shall be considered to hold a right or entitlement directly in the reporting company, if he satisfies any of the following criteria,

a)     the shares in the reporting company representing such right or entitlement are held in the name of the individual;

b)     the individual holds or acquires a beneficial interest in the share of the reporting company under section 89, and has made a declaration in this regard to the reporting company.

OBLIGATIONS

A)   SIGNIFICATION BENEFICIAL OWNER

Every SBO is required to make a declaration in BEN-1 to the Company with in ninety days from 08.02.2019 (the date of commencement of the Companies (Significant Beneficial Owners) Amendment Rules, 2019) and every individual, who subsequently becomes a significant beneficial owner, or where his significant beneficial ownership undergoes any change shall file a declaration in Form No. BEN-1 to the company, within thirty days of acquiring such significant beneficial ownership or any change therein.

Explanation.- Where an individual becomes a significant beneficial owner, or where his significant beneficial ownership undergoes any change, within ninety days of the commencement of the Companies (Significant Beneficial Owners) Amendment Rules, 2019, it shall be deemed that such individual became the significant beneficial owner or any change therein happened on the date of expiry of ninety days from the date of commencement of said rules, and the period of thirty days for filing will be reckoned accordingly.

B)    COMPANY

a)     Every reporting company is required to identify the existence of a significant beneficial owner and necessitate him to make a declaration in Form No. BEN-1.

b)     The reporting company shall file a return in Form No. BEN-2 with the Registrar of Companies within a period of thirty days from the date of receipt of declaration by SBO in Form No. BEN.1 along with the fees as prescribed in Companies (Registration offices and fees) Rules, 2014.

c)     Every Company shall maintain a register of interest declared or any change thereof  which shall include name, date of birth , address of individual, details of ownership in the Company and such other details in Form No.- BEN 3. 

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

 d) The company shall give notice in Form No. BEN-4, to any person whom the company knows or has reasonable cause to believe—

(a) to be a significant beneficial owner of the company;

(b) to be having knowledge of the identity of a significant beneficial owner; or

(c) to have been a significant beneficial owner of the company at any time during the three years immediately preceding the date on which the notice is issued,

and who is not registered as a significant beneficial owner with the company.

* The information required by such notice shall be given bythe concerned person within a period not exceeding thirty days of the date of the notice.

APPLICATION TO TRIBUNAL

The reporting company shall apply to the Tribunal within 15 days from the expiry of period specified in notice , -

(i)              where any person fails to give the information required by the notice in Form No. BEN-4, within the time specified therein; or

(ii)             where the information given is not satisfactory,

for order directing that the shares in question be subject to restrictions, including –

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

(b) suspension of the right to receive dividend or any other distribution 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.

The Tribunal may, after giving an opportunity of being heard to the parties concerned, make such order restricting the rights attached with the shares within a period of sixty days of receipt of application or such other period.

The company or the person aggrieved by the order of the Tribunal may make an application to the Tribunal for relaxation or lifting of the restrictions placed), within a period of one year from the date of such order.

NON APPLICABILITY OF NEW SBO RULE

a) the Authority constituted under Section 125(5).
b) Its holding reporting Company
c) the Central or State Government 
d) Entities governed by Central or  State Government or partly by any of them.
e) All investment vehicles registered by SEBI.
f) Investment vehicles governed by RBI/IRDA, Pension Fund Regulatory and Development Authority .

PROCEDURE FOR CLAIMING UNPAID DIVIDEND

Any amount transferred to Unpaid Dividend Account of the Company, which is unpaid or unclaimed for more Seven Years shall be transferred along with interest accrued, to Investor Education & Protection Fund. (IEPF) and the company shall send a statement in Form IEPF-1 the details of such transfer to the authority which administers the said Fund and that authority shall issue a receipt to the company as evidence of such transfer.

Investor can claim unpaid or unclaimed Dividend, matured deposits, matured debentures, application money due for refund, or interest thereon, sale proceeds of fractional shares, redemption proceeds of preference shares etc., from IEPF by following this procedure

PROCEDURE FOR CLAIMING IEPF REFUND

1.     Claimant (Investor) has to fill form IEPF-5, available online on website, www.iepf.gov.in., Direct Link http://www.iepf.gov.in/IEPF/refund.html

PARTICULARS OF IEPF-5

a.      Name of Applicant along with address, phone number, mobile number and email id.

b.     Particulars of the Company/Bank from which the amount is due.

c.      Details of shares claimed.

d.     Details of amount Claimed.

e.      Year wise details of Securities/ Deposits for which the amount is claimed.

f.      Aadhar Number or Passport/OCI/PIO Card No.(In case of NRI/foreigners)

g.     Details of Bank Account.

2.     Save the form on your desktop and upload the same on MCA website and a challan or acknowledgment receipt will be generated .

3.     Investor shall take the print out of the form and send it to the Nodal Officer (IEPF) of the Company Concerned at its registered office in an envelope marked “claim for refund from IEPF Authority) along with following documents:-

a.      Copy of acknowledgement/Challan,

b.     Indemnity Bond(original) with claimant signature on non judicial stamp paper if the claim is more than Rupees 10,000 and  if the claim is less than 10,000 Rupees the bond is on plain paper,

c.      Advance Stamped receipt(original) with Claimant Signature ,a revenue receipt to be pasted and claimant has to cross sign the receipt,

d.     Proof of Entitlement in original (Certificate of Shares/ Interest warrant Application No.),

e.      Copy of self attested Aadhar Card and PAN card,

f.      Cancelled Cheque Leaf,

g.     Copy of Passport, OCI and PIO card in case of foreigners and NRI,

h.     Self attested Latest Client Master List of Demat Account,

4.     The company shall, within fifteen days from the date of receipt of claim, send a verification report to the Authority in the format specified by the Authority along with all the documents submitted by the claimant

5.     After verification of the entitlement of the claimant

a)     to the amount claimed, the Authority and then Drawing and Disbursement Officer of the Authority shall present a bill to the Pay and Accounts Office for e- payment as per the guidelines,

b)      to the shares claimed, the Authority shall issue a refund sanction order with the approval of the Competent Authority and shall credit the shares to the DEMAT account of the claimant to the extent of the claimant’s entitlement.

6. In   case where the application is incomplete  or not approved, a communication will be sent to the Claimant and the Concerned Company by the Authority detailing deficiencies of the Application. 

NOTE:-

 * The claimant shall file only one consolidated claim in respect of a company in a financial year.

* An application received for refund of any claim duly verified by the concerned company shall be disposed off by the Authority within sixty days from the date of receipt of the verification report from the company, complete in all respects and any delay beyond sixty days shall be recorded in writing specifying the reasons for the delay and the same shall be communicated to the claimant in writing or by electronic means.

* In case, claimant is a legal heir or successor or administrator or nominee of the registered share holder, he has to ensure that the transmission process is completed by the company before filing any claim with the Authority.

For Further Clarification, drop email at shailja.tiwari16@gmail.com.

RESTORATION OF NAME OF COMPANY STRUCK OFF BY REGISTRAR SUO MOTO

The Registrar of Companies may remove the name of a company from the register of companies in terms of section 248(1) of the Act and  shall give a notice in writing in Form STK-1 to all the directors of the company at the addresses available on record, by registered post with acknowledgement due or by speed post and it shall contain the reasons on which the name of the company is to be removed from the register of companies and shall seek representations against the proposed action from the company and its Directors along with the copies of relevant documents, if any, within a period of thirty days from the date of the notice.   

COMPANIES WHICH CANNOT BE REMOVED FROM THE REGISTER OF COMPANIES

Following categories of companies shall not be removed from the register of companies:-

1)     listed companies;

2)     companies that have been delisted due to non-compliance of listing regulations or agreement or any statutory laws;

3)     vanishing companies;

4)     companies where inspection or investigation is ordered and being carried out or actions on such order are yet to be taken up or were completed but prosecutions arising out of such inspection or investigation  are pending in the Court;

5)     companies where notices under section 234 of the Companies Act, 1956 (1 of 1956) or section 206 or section 207 of the Act have been issued by the Registrar or Inspector and reply thereto is pending or report under section 208 has not yet been submitted or follow up of instructions on report under section 208 is pending or where any prosecution arising out of such inquiry or scrutiny, if any, is pending with the Court;

6)     companies against which any prosecution for an offence is pending in any court;

7)     companies whose application for compounding is pending before the competent authority for compounding the offences committed by the  company or any of its officers in default;

8)     companies, which have accepted public deposits which are either outstanding or the company is in default in repayment of the same;

9)     companies having charges which are pending for satisfaction; and

10) companies registered under section 25 of the Companies Act, 1956 or section 8 of the Act.

WHO CAN FILE APPLICATION TO NCLT AGAINST REGISTRAR ORDER

The application for restoration of name of Company can be filed to National Company Law Tribunal by any person aggrieved by an order of the Registrar within a period of three years from the date of such order as per Section 252(1) of the Act.

PROCESS OF FILING APPLICATION TO NCLT

Section 252(1) read with Rule 87A of National Company Law Tribunal Rules 2016, an application under Section 252(1) may be filed to Tribunal in Form- NCLT-9.

Documents to be attached to Form NCLT-9

a)     Copy of MOA & AOA.

b)     Affidavit Verifying Petition in Form- NCLT-6

c)     List of Directors of Company

d)     Order of Registrar of Companies(Certified copy)

e)     Evidence for Payment of Fees made.

f)      Memorandum of Appearance

g)     Copy of Board Resolution

h)     Copy of Pending Balance sheets.

i)      Any other Document in support of the application.

SERVICE OF NOTICE

A copy of the appeal or application shall be served on the Registrar and on such other persons as the Tribunal may direct, not less than fourteen days before the date fixed for hearing of the appeal or application, as the case may be.

OPPORTUNITY OF BEING HEARD 

Before Passing any order, The Tribunal shall give a reasonable opportunity of making representation and of being heard to the Registrar and all the persons concerned.

PASSING OF ORDER

Upon hearing the appeal or the application or any adjourned hearing thereof, the Tribunal may pass appropriate order, as it deems fit. Where the Tribunal makes an order restoring the name of a company in the register of companies, the order shall direct that-

(a) the appellant or applicant shall deliver a certified copy to the Registrar of Companies within thirty days from the date of the order;

(b) on such delivery, the Registrar of Companies do, in his official name and seal, publish the order in the Official Gazette

(c) ) the appellant or applicant do pay to the Registrar of Companies his costs of, and occasioned by, the appeal or application, unless the Tribunal directs otherwise; and

(d) the company shall file pending financial statements and annual returns with the Registrar and comply with the requirements of the Companies Act, 2013 and rules made thereunder within such time as may be directed by the Tribunal.

FILING OF ORDER

The Company shall file order passed by Tribunal to Registrar in Form INC-28.

For Further Clarification, drop email at shailja.tiwari16@gmail.com