3 replies
  1. CA Ajay K Gupta
    CA Ajay K Gupta says:

    If a closely held company suppose A (P) Ltd (consisting of father (32% share holding), mother(21% share holding )
    and three sons (47% shareholding) is holding 23% shares in another company say B (P) Ltd.

    None of the shareholders of A (P) Ltd. holds any shares in B (P) Ltd.

    Is any of the sharehoder of A (P) Ltd. will be regarded as SBO of B (P) Ltd.

    • Aisha Ansari
      Aisha Ansari says:

      Dear Sir,

      Assuming that shareholders of A (P) Ltd. are persons acting together, their shareholding will be aggregated for the purpose of computation of majority stake in A (P) Ltd, hence, their collective holding is excess of 50% i.e. majority stake in A (P) Ltd.

      Further, A (P) Ltd. is holding more than 10% in B (P) Ltd. Therefore all the shareholders of A (P) Ltd. will be regarded as SBO of B (P) Ltd.

      You may refer Illustration 14 of this article for further clarification.

      Further our other research material on this topic is available on: http://vinodkothari.com/article-corner-on-sbos/

      • CA Ajay Gupta
        CA Ajay Gupta says:

        In my opinion intention behind identifying SBO is to find the real owner/ beneficiary of shares. When we assume that all the shareholders of A (P) Ltd, which is a closely held company, are acting together then ultimate beneficiaries are all the shareholders, consisting of members of a single family. There is no question of hidden beneficiary.
        I think in that case theory of lifting of corporate veil should be applied and company and shareholders should be treated as same.
        If it is assumed that shareholders are not acting together then there is no question of SBO at all.


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