Posts

Control based SBO identification beyond the current legislation

Critical analysis of a recent RoC’s Order u/s 90 of the CA, 2013

– Neha Malu, Deputy Associate | corplaw@vinodkothari.com

Background

The requirement of identification of Significant Beneficial Owners (“SBOs”) for companies in India kicked in with effect from 13th June, 2018[1]. It marks its origination based on the recommendations issued by the Financial Action Task Force (“FATF”). However, since its inception, neither the regulator nor the regulatees have been able to take a sigh of relief when it comes to implementing the directive for identifying an SBO for their company. There were several rounds of amendments[2], followed by extending the requirement to identify such SBO for LLPs[3] and thereafter introducing the concept of ‘designated persons’[4] for sharing the information of beneficial owners. Not only that, but to ensure companies do not miss their identification spree, the RoC has been sending advisory to several companies since the last year being 2023 seeking clarification on why they have not or whether they have identified the company’s SBO.

In the present article, the Author discusses the legal framework governing SBOs in the Indian parlance with a specific focus on the identification of SBOs who have or is said to have control  without any shareholding or voting rights in the light of the Adjudication Order[5] issued by the Registrar of Companies, NCT of Delhi and Haryana (“ROC”), in the matter of LinkedIn Technology (“Order”) and also delves into the discussion under the FATF guidance in this respect.

Read more

Presentation on Significant Beneficial Owners (for companies & LLPs)

Team Corplaw | corplaw@vinodkothari.com

Loader Loading…
EAD Logo Taking too long?

Reload Reload document
| Open Open in new tab

Download as PDF [1.34 MB]

Our article corner on SBO: https://vinodkothari.com/article-corner-on-sbos/

Online workshop on Significant Beneficial Owners: For Companies and LLPs

Click here to register for the workshop: https://forms.gle/3vdQjaLJY1Sgs4Ps5
Loader Loading…
EAD Logo Taking too long?

Reload Reload document
| Open Open in new tab

Download as PDF [352.15 KB]

SBOs behind LLPs all set to be surfaced

– Avinash Shetty, Asst. Manager & Hari Dwivedi, Executive (corplaw@vinodkothari.com)

Introduction

The Ministry of Corporate Affairs (‘MCA’) in the year 2018, introduced the provision for declaration by individuals identified as Significant Beneficial Owners (‘SBOs’) for companies under section 90 of the Companies Act, 2013 (‘Act’). Subsequently, MCA extended the ambit of the said provisions to Limited Liability Partnerships (LLPs) through notification dated February 11, 2022. However, the notification prompted concerns and queries regarding the implementation of SBO provisions on LLPs. These concerns have been addressed by the recent notification dated  November 9, 2023 (‘LLP SBO Rules’). The rationale behind this extension is to align the framework for identification of SBO’s of LLPs with that of companies.

While the provisions are on similar lines as that brought for companies under the Act, however, the difference is mostly in terms of the manner of determining the SBOs in case of LLPs. In case of LLPs it is calculated based on holding of capital contribution (shares in case of companies), voting rights in respect of management or policy decisions of LLP (shares in case of companies) and right to receive or participate in distributable profits (dividend in case of companies) or any other distribution besides, the right to exercise control or significantly influence in any manner other than direct holdings.

The article explains the requirements of the LLP SBO Rules, obligations of the LLPs, and the actionables to be taken in order to comply with the requirements.

Read more

Designated Persons to reveal beneficial owners:Summary of the 27th October notification

Loader Loading…
EAD Logo Taking too long?

Reload Reload document
| Open Open in new tab

Download as PDF [432.58 KB]

You may also refer to our detailed article and YouTube video on the same.