Company · Ownership
An entity owns our shares — who counts as the 'significant beneficial owner'?
The short answer
When an entity holds your shares, the law looks through that entity to identify the individual significant beneficial owner — someone holding beneficial interest of not less than 25%, or such other percentage as may be prescribed (s.90(1), Companies Act 2013; ICSI commentary cites the prescribed figure as 10% — confirm under the SBO Rules, 2018 on MCA21), or exercising significant influence or control. That individual declares the interest to the company (BEN-1); the company records it in its register (BEN-3) and files a return with the Registrar (BEN-2). Timeline as per Companies (Significant Beneficial Owners) Rules, 2018 — confirm on MCA21.
What gets filed with MCA
Within 30 days of acquiring significant beneficial ownership or any change therein (Rule 3(2), Companies (Significant Beneficial Owners) Rules, 2018 as amended in 2019; s.90(1)).
Section 90(1), Companies Act 2013; Rules 2(1)(h) and 3, Companies (Significant Beneficial Owners) Rules 2018
Within 30 days from the date the company receives the BEN-1 declaration (Rule 4, Companies (Significant Beneficial Owners) Rules, 2018 as amended in 2019; s.90(4)).
Section 90(4), Companies Act 2013; Rule 4, Companies (Significant Beneficial Owners) Rules 2018
The paperwork nobody tells you about
Statutory formats that never touch the MCA portal — but an ROC inspection or due diligence will ask for every one of them.
Company's register of significant beneficial owners
Section 90(2), Companies Act 2013
Company's notice seeking SBO information from members it believes hold for others
Section 90(5), Companies Act 2013
The sequence
- 1Identify individuals who hold beneficial interest at or above the SBO threshold through entities (s.90(1): 25% or such other percentage as may be prescribed), or exercise significant influence or control
- 2Issue BEN-4 notice to members you believe hold shares for others, if information is missing
- 3Collect BEN-1 declarations from each significant beneficial owner on acquisition or change (s.90(1)) — Timeline as per Companies (Significant Beneficial Owners) Rules, 2018 — confirm on MCA21
- 4File BEN-2 with the Registrar (s.90(4)) — Timeline as per Companies (Significant Beneficial Owners) Rules, 2018 — confirm on MCA21
- 5Maintain the BEN-3 register of significant beneficial owners on paper
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Questions founders actually ask
What is the threshold for a significant beneficial owner?
An individual holding beneficial interest of not less than 25%, or such other percentage as may be prescribed (s.90(1), Companies Act 2013; ICSI commentary cites the prescribed figure as 10% — confirm under the SBO Rules, 2018 on MCA21), or exercising significant influence or control — looked through entities under Section 90.
What if a corporate entity holds our shares?
Section 90 requires looking through entities to the individual behind them. If the company suspects a member holds for someone else, it can issue a BEN-4 notice under Section 90(5) to obtain the information.
What are the filing deadlines for SBO compliance?
Section 90(1) requires the SBO to declare within such period of acquisition or change as may be prescribed, and Section 90(4) requires the company to file its return within such time as may be prescribed. Timeline as per Companies (Significant Beneficial Owners) Rules, 2018 — confirm on MCA21.
Reviewed by Harun Raaj, Chartered Accountant
Founder, Harun Raaj & Associates. Last verified 2026-08-24 against MCA V3 records and ICSI reference material. Form-level deadlines and penalties live on the linked form pages and update there.