There are different conditions where the beneficial ownership can be determined by the company. The beneficial ownership gives individual the right to exercise any or all rights attached to his shares or receive/participate in any dividend or other distribution in context of the share.
In case the member is a company or partnership firm it should not hold less than 10% of the share capital or entitled to not less than 10% of the profits of the partnership. In case the member is a trust then it should include all the information about the settler, trustee and beneficiary with not less than 10% interest in the trust.
As per Section 90, of the Companies Act, 2013, every company should maintain a register of interest (BEN-3) as declared by the respective individuals with the name of the individual, address, date of birth and details of ownership in the company.
The register will be open for inspection by any member of the company on payment of the prescribed fee. The company also needs to file returns of significant beneficial ownership and the changes (if any).
The company can also apply to the Tribunal within 15 days of the expiry period (while filing return) asking for restrictions on the shares in question or restricting/transferring the rights of the person in case any information furnished in incorrect or false.
Recently, the Ministry of Corporate Affairs has brought in amendments in the governing rules of Significant Beneficial Ownership. Now, it is mandatory for all the beneficial owners to declare their interests in the company.
The new rules have also listed down detailed criteria for the indirect holdings of an individual in a company to determine its authenticity.
In these amendments presented by the department there are a few exemptions for individuals who hold the shares of the company as