Section 90 of the Companies Act, 2013
Here is a detailed explanation of Section 90 of the Companies Act, 2013, updated with the latest amendments:
📘 Section 90 – Register of Significant Beneficial Owners (SBO) in a Company
This section mandates companies to identify and maintain records of individuals who have a significant beneficial interest in the company and ensure regulatory filings and compliance.
🧾 Key Provisions of Section 90
1. Declaration by Significant Beneficial Owner
Every individual who:
Holds 10% or more beneficial interest in a company, directly or indirectly,
Or exercises significant influence or control over the company,
must submit a declaration to the company (in Form BEN-1).
2. Company's Obligation
The company must:
Maintain a Register of Significant Beneficial Owners in Form BEN-3,
File a return with the Registrar of Companies (ROC) in Form BEN-2 within the prescribed time,
Take necessary steps to identify SBOs, even if they do not voluntarily disclose.
3. Notice by the Company
If the company has reasonable cause to believe that someone is an SBO but has not declared it, it can send a notice (Form BEN-4) asking for information.
4. Tribunal’s Role (NCLT)
If a person fails to respond or provide information:
The company can apply to the National Company Law Tribunal (NCLT),
NCLT may restrict the rights attached to those shares (e.g., voting, dividend, transfer, etc.).
5. Penalties for Non-Compliance
SBO: ₹1 lakh fine, and ₹1,000 per day for continuing default.
Company and its officers: Same penalty as above.
False information: Up to 1 year imprisonment or fine up to ₹10 lakh or both.
✅ Who is an SBO?
As per Rule 2(h) of the Companies (Significant Beneficial Owners) Rules, 2018:
A person is an SBO if they:
Hold ≥10% shares, voting rights, or control in the company,
Either directly or indirectly (through layers of companies or trusts).
📄 Relevant Forms
| Form No. | Purpose |
|---|---|
| BEN-1 | Declaration by SBO to the company |
| BEN-2 | Company’s return to ROC |
| BEN-3 | Company’s register of SBOs |
| BEN-4 | Notice by company to suspected SBO |
🏛️ Objective of Section 90
To:
Prevent money laundering and benami transactions,
Promote corporate transparency,
Comply with global standards (like FATF recommendations) on beneficial ownership.
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