SBO Under Section 90: BEN-2 Checklist
SBO compliance is where simple cap tables often fail. Section 90 looks through direct ownership to significant beneficial ownership, including acting alone, together, through persons, trusts or foreign structures.
An individual is a Significant Beneficial Owner if they hold, directly or indirectly, 10% or more of shares, voting rights or dividend right in the company (the threshold was lowered from 25% to 10% in 2019). That individual must file Form BEN-1 within 90 days of the SBO Rules commencement (or of becoming an SBO); the company must then file Form BEN-2 within 30 days of receiving the BEN-1 declaration. If the company suspects an undeclared SBO, it must issue Form BEN-4 to that person and can move to restrict their shares if there is no response.
For broader context, see the Companies Act, MCA and Startup Compliance Hub.
Section 90 base
Section 90 requires every individual who, acting alone or together, or through one or more persons or trust, including persons resident outside India, holds significant beneficial interests, to make declaration to the company, and the company maintains register and filing controls.
The threshold and filing timeline most checklists skip
- 10% threshold: an individual is an SBO if they hold, directly or indirectly, 10% or more of shares, voting rights or the right to receive dividend in the reporting company - this was lowered from 25% in 2019, so any cap-table review done against the old 25% figure is now wrong.
- Form BEN-1: the individual identified as an SBO must file a declaration within 90 days of the SBO Rules commencing, or within 30 days of becoming an SBO / any change in their SBO status thereafter.
- Form BEN-2: the company must file its return with the Registrar within 30 days of receiving the BEN-1 declaration - the company's filing clock starts only once it actually receives the individual's declaration, not from the ownership-change date itself.
- Form BEN-4: if the company has reasonable cause to believe an undeclared SBO exists, it must issue a formal notice in Form BEN-4 - failure to respond can lead the company to apply to the Tribunal to restrict the relevant shares.
SBO review table
| Structure | Review question |
|---|---|
| Individual holds shares through company/LLP | Who ultimately controls or benefits? |
| Foreign holding structure | Are resident-outside-India persons part of beneficial chain? |
| Trust / nominee arrangement | Who has beneficial interest or control? |
| Investor rights / pooling | Are persons acting together? |
| Change in ownership/control | Does fresh declaration and filing trigger arise? |
Company evidence file
- Shareholding structure chart.
- Beneficial ownership declaration tracker.
- Register of significant beneficial owners.
- BEN filing acknowledgement where applicable.
- Board note on review outcome.
Finin2min warning
Official sources used
This article is intentionally source-limited to official MCA / India Code material. Verify final filing positions with the latest Act, Rules, MCA forms and portal advisories before publishing.
- India Code: Section 90 — Register of Significant Beneficial Owners
- India Code: Companies (Significant Beneficial Owners) Rules, 2018
- India Code: Companies Act, 2013 official PDF
FAQs
Section 90 covers register of significant beneficial owners in a company.
Yes. Section 90 refers to persons acting alone/together or through persons/trusts, including persons outside India.
Yes. Funding rounds can change indirect ownership/control and trigger review.
Source and review trail
Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.
- Primary category
- Companies Act & MCA
- Official starting point
- www.mca.gov.in
See “Official sources used” above for the Section 90/SBO-Rules and Companies Act PDF references used in this article.
Primary sources & related provisions
Statutory provisions referenced in this guide: