What is beneficial ownership in a company & what compliances are required?

In corporate group structuring to achieve certain tax benefits, ownership is controlled indirectly through investment entities, trusts, special purpose vehicles (SPV). Many a times the location of said investment entities are in different countries. With the objective to reach to a last point of ownership beneficiaries, declaration of Beneficial Ownership (BO) in companies is introduced even for unlisted companies. The said transparency was in existence for several years under securities & listing laws applicable to listed entities where public stake is involved. BO declarations also enables the government to ensure that there is no indirect control of banned & regulated countries on Indian businesses and benefits of Indian Market & resources are not driven to those banned & regulated countries.

Under the governing provisions of Companies Act & Securities Laws every listed & unlisted entity is required to disclose indirect Beneficial Ownership in the Company and subsequently upon any change therein. The law has identified the definition of BO & provided ownership thresholds for making such declarations.

BO structuring, identification, understanding & disclosure is crucial professional activity since it has direct impact on owners & their ownership in the Company. Bizfirst is equipped to serve you on all BO professional needs. For more details connect to our Biz Smart Executive