Everything About Amendment in
SBO Provisions
MCA Notification Dated: 27.10.2023.
(28th October 2023)
SHORT SUMMARY:
The
author will cover the "Latest Amendment in Beneficial Owner Provisions"
in this column.
The
MCA has issued a Notification. Dated: October 27th, 2023-Subject: Companies
(Management and Administration) Second Amendment Rules, 2023.
MCA
recently issued penalty notifications to about 2000 companies for late filing
of BEN-2 (SBO Declaration). MCA has issued an advising notice to all companies
to fulfill their SBO compliances under Section 90.
MCA
is extremely concerned about SBO compliance. In continuation of the same, the
MCA revised the Companies (Management and Administration) Rules, 2014, adding
rules 4 to 8 after sub-rule (3) in rule 9.
To
set up corporate governance MCA is working hard to ensure that Beneficial Owner
compliance is properly established u/s 89 and 90.
Provisions
of Companies Act, 2013:
·
Section 89
·
Rule 9 of Companies
(Accounts) Rules, 2014 of the Companies (Management and Administration) Rules,
2014
Applicability
These
amendment rules shall be applicable on all the Companies except One Person
Company.
INTRODUCTION
MCA has
added Sub Rule 4 to 8 after Sub rule 3 in Rule 9. As per the amendment,
Designation
of a Person as Beneficial Owner Officer:
v Every
Company shall designate a person under these rules “who shall be responsible
for furnishing, and extending co-operation for providing, information to the
Registrar or any other authorized officer with respect to beneficial interest
in shares of the company”
Who can be
Designated for such Post:
i.
Company Secretary, if there is
any requirement to appoint CS as per provisions of the Act; or
ii.
A Key managerial Person, If
there is no CS; or
iii.
Every Director, if there is no
CS and KMP
How to
Designate?:
Company
can pass a resolution in Board Meeting for designation of such person/ persons
under these rules.
How to
inform the same to ROC?:
As per sub-Rule
7, Every company shall inform the details of the designated person in Annual
return i.e. MGT 7 required to be filed after implementation of these rules.
What is
the process to change Designated Person?:
As per
sub-Rule 8, If the company changes the designated person at any time, it shall
intimate the same to the Registrar in e-form GNL-2 specified under the
Companies (Registration Offices and Fees) Rules, 2014.
QUICK BITES:
Que 1:
Who will be considered as designated person until company doesn’t designate any
person under these rules? (DG)
Ans 1:
Until a person is designated as referred under sub-rule (4), the following
persons shall be deemed to have been designated person
i.
company secretary, if
there is a requirement of appointment of such company secretary under the Act
and the rules made thereunder; or
ii.
every Managing Director
or Manager, in case a company secretary has not been appointed; or
iii.
every director, if
there is no company secretary or a Managing Director or Manager.
Note: Two points are not clear in the given Notification. MCA should
issue clarification on the same.
1.
Whether Companies needs to file any form like
GNL-2 for first time designation of any person under these rules?
2.
As per Sub
Rule 5, Every Director shall be considering as Designated Person if there is no
CS or KMP. Whether instead of every director company can designate only one
director?
Author – CS
Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from
Delhi and can be contacted at csdiveshgoyal@gmail.com).
Disclaimer: The entire
contents of this document have been prepared based on relevant provisions and
as per the information existing at the time of the preparation. Although care
has been taken to ensure the accuracy, completeness, and reliability of the
information provided, I assume no responsibility, therefore. Users of this
information are expected to refer to the relevant existing provisions of
applicable Laws. The user of the information agrees that the information is not
professional advice and is subject to change without notice. I assume no
responsibility for the consequences of the use of such information.
IN NO EVENT SHALL I SHALL BE
LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM,
ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION