Lifting the Corporate Veil and Identifying Beneficial Owners
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This document discusses reporting requirements for substantial beneficial owners (SBOs) of Indian companies. It outlines a 3-step process for SBO reporting: 1. SBOs submit a declaration of their shareholding in Form BEN-1 to the reporting company. 2. The reporting company files the declarations received in Form BEN-2 with the Ministry of Corporate Affairs. 3. The reporting company maintains a register of SBOs in Form BEN-3. It also discusses complications that can arise with complex holding structures and non-cooperative SBOs.
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Lifting the Corporate Veil and Identifying Beneficial Owners
- 1. Lifting the Corporate Veil.. 1 Jafeel P S Senior Associate, SAS Partners Corporate Advisors
- 5. Shares: holds not less than 10% Voting Rights: holds not less than 10% Dividend/ Distributions: participation of not less than 10% Significant influence / Control
- 7. Step III Reporting Company maintains Register of SBO in Form BEN-3 Step I SBO submits declaration in Form BEN-1 Step II Reporting Company files Form BEN-2
- 8. BRANCH OFFICE Act as buying/selling agent of Parent Company SEBI Registered Investment Vehicles (MF, AIF, REIT, InVIT) 8 IEPF Fund Managing Authority CENTRAL / STATE GOVT. - Govt. / any local authority -Controlled fully or partly by any Govt. RBI Regulated Investment Vehicles (IRDA, Pension Fund RDA) HOLDING REPORTING COMPANY Were declaration in Form BEN 2 is disclosed in such Holding Reporting Company
- 10. Indian Company XYZ Ltd 2% Mr. X 60% Mr. Y 40% Mr. X 8% Mr. Y 90%
- 11. Indian Company XYZ LLC 51% ABC LLC 51% Mr. A 50% Mr. B 50% Mr. Y 49% Mr. Y 49%
- 12. Indian Company A LLC 30% Mr. A 20% Mr. B 10% Mr. C 10% Mr. D 20% Mr. X 10% Mr. Y 30% Mr. X 70%
- 13. Notice in Form BEN-4 If the declaration received; Company to File Form BEN-2 If the declaration is not received; Company to file an application with the Tribunal Non Co-operative SBO
- 14. Other restrictions Any other restriction on all or any of the rights attached with the shares Voting Suspension of voting rights Dividend Suspension of the right to receive dividend or any other distribution On the transfer of interest attached to the Shares Transfer
- 15. 1 2 3