Chapter VII - Management and Administration
Section 90
Section 90: register of significant beneficial owners
Section 90 makes individuals who ultimately hold a significant interest in, or exercise significant influence or control over, a company declare that position, and makes the company record, file and investigate it.
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This article is for general information. Refer to the Companies Act, 2013 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) Every individual, who acting alone or together, or through one or more persons or trust, including a trust and persons resident outside India, holds beneficial interests, of not less than twenty-five per cent. or such other percentage as may be prescribed, in shares of a company or the right to exercise, or the actual exercising of significant influence or control as defined in clause (27) of section 2, over the company (herein referred to as “significant beneficial owner”), shall make a declaration to the company, specifying the nature of his interest and other particulars, in such manner and within such period of acquisition of the beneficial interest or rights and any change thereof, as may be prescribed: Provided that the Central Government may prescribe a class or classes of persons who shall not be required to make declaration under this sub-section. (2) Every company shall maintain a register of the interest declared by individuals under sub-section (1) and changes therein which shall include the name of individual, his date of birth, address, details of ownership in the company and such other details as may be prescribed. (3) The register maintained under sub-section (2) shall be open to inspection by any member of the company on payment of such fees as may be prescribed. (4) Every company shall file a return of significant beneficial owners of the company and changes therein with the Registrar containing names, addresses and other details as may be prescribed within such time, in such form and manner as may be prescribed. (4A) Every company shall take necessary steps to identify an individual who is a significant beneficial owner in relation to the company and require him to comply with the provisions of this section. (5) A company shall give notice, in the prescribed manner, to any person (whether or not a member of the company) whom the company knows or has reasonable cause to believe— (a) to be a significant beneficial owner of the company; (b) to be having knowledge of the identity of a significant beneficial owner or another person likely to have such knowledge; or (c) to have been a significant beneficial owner of the company at any time during the three years immediately preceding the date on which the notice is issued, and who is not registered as a significant beneficial owner with the company as required under this section. (6) The information required by the notice under sub-section (5) shall be given by the concerned person within a period not exceeding thirty days of the date of the notice. (7) The company shall,— (a) where that person fails to give the company the information required by the notice within the time specified therein; or (b) where the information given is not satisfactory, apply to the Tribunal within a period of fifteen days of the expiry of the period specified in the notice, for an order directing that the shares in question be subject to restrictions with regard to transfer of interest, suspension of all rights attached to the shares and such other matters as may be prescribed. (8) On any application made under sub-section (7), the Tribunal may, after giving an opportunity of being heard to the parties concerned, make such order restricting the rights attached with the shares within a period of sixty days of receipt of application or such other period as may be prescribed. (9) The company or the person aggrieved by the order of the Tribunal may make an application to the Tribunal for relaxation or lifting of the restrictions placed under sub-section (8), within a period of one year from the date of such order: Provided that if no such application has been filed within a period of one year from the date of the order under sub-section (8), such shares shall be transferred, without any restrictions, to the authority constituted under sub-section (5) of section 125, in such manner as may be prescribed. (9A) The Central Government may make rules for the purposes of this section. (10) If any person fails to make a declaration as required under sub-section (1), he shall be liable to a penalty of fifty thousand rupees and in case of continuing failure, with a further penalty of one thousand rupees for each day after the first during which such failure continues, subject to a maximum of two lakh rupees. (11) If a company, required to maintain register under sub-section (2) and file the information under sub-section (4) or required to take necessary steps under sub-section (4A), fails to do so or denies inspection as provided therein, the company shall be liable to a penalty of one lakh rupees and in case of continuing failure, with a further penalty of five hundred rupees for each day, after the first during which such failure continues, subject to a maximum of five lakh rupees and every officer of the company who is in default shall be liable to a penalty of twenty-five thousand rupees and in case of continuing failure, with a further penalty of two hundred rupees for each day, after the first during which such failure continues, subject to a maximum of one lakh rupees. (12) If any person wilfully furnishes any false or incorrect information or suppresses any material information of which he is aware in the declaration made under this section, he shall be liable to action under section 447.
Introduction
The section in its current form was substituted by the Companies (Amendment) Act, 2017 (1 of 2018), section 22, in force from 13 June 2018 under S.O. 2422(E). Sub-sections (4A) and (9A) were added, and sub-section (9) replaced, by the Companies (Amendment) Act, 2019. The penalties in sub-sections (10) and (11) were replaced by the Companies (Amendment) Act, 2020 from 21 December 2020.
The statutory threshold is beneficial interest of not less than twenty-five per cent. "or such other percentage as may be prescribed". The Companies (Significant Beneficial Owners) Rules, 2018 supply the prescribed details, so read the current Rules with the section.
Key takeaways
Individual declares
An individual holding the threshold beneficial interest, or the right to exercise or actually exercising significant influence or control as defined in section 2(27), declares to the company.
Company records and files
The company keeps a register of the declarations, opens it to member inspection on the prescribed fee, and files a return with the Registrar.
Duty to identify
Sub-section (4A) requires every company to take necessary steps to identify significant beneficial owners and require them to comply.
Who is a significant beneficial owner
Sub-section (1) covers an individual who, acting alone or together, or through one or more persons or a trust (including a trust and persons resident outside India), holds beneficial interests of not less than twenty-five per cent. or such other percentage as may be prescribed in the shares of a company, or has the right to exercise, or actually exercises, significant influence or control as defined in clause (27) of section 2. The declaration states the nature of the interest and other particulars, in the manner and within the period prescribed after acquisition or change. The Central Government may prescribe classes of persons who need not declare.
- India Code — consolidated Companies Act, 2013, section 90
- eGazette — Companies (Amendment) Act, 2017 (1 of 2018)
- eGazette — S.O. 2422(E), 13 June 2018 (commencement of Act 1 of 2018, sections 22, 24, 25, 26 and 71)
- eGazette — Companies (Amendment) Act, 2019 (22 of 2019)
- eGazette — S.O. 2947(E), 14 August 2019 (commencement of Act 22 of 2019, section 14(i), (iii) and (iv), from 15 August 2019)
- eGazette — Companies (Amendment) Act, 2020 (29 of 2020)
- eGazette — S.O. 4646(E), 21 December 2020 (commencement of Act 29 of 2020)
- eGazette — Companies (Significant Beneficial Owners) Rules, 2018, G.S.R. 561(E)
- eGazette — G.S.R. 463(E), 5 June 2015 (exemptions for Government companies)
- eGazette — G.S.R. 582(E), 13 June 2017 (amending G.S.R. 463(E))
- eGazette — S.O. 802(E), 23 February 2018 (amending G.S.R. 463(E))
- eGazette — G.S.R. 151(E), 2 March 2020 (amending G.S.R. 463(E))
Register, inspection and return
The company maintains a register of declared interests and changes, including the individual’s name, date of birth, address, details of ownership and other prescribed details (sub-section (2)). Any member may inspect it on payment of the prescribed fee (sub-section (3)). The company files a return of significant beneficial owners and changes with the Registrar within the time, form and manner prescribed (sub-section (4)).
Tracing owners: notice, Tribunal and restrictions
A company must give notice in the prescribed manner to any person it knows or has reasonable cause to believe is, or in the preceding three years was, a significant beneficial owner, or has knowledge of one, and who is not registered as such (sub-section (5)). The information must be given within thirty days of the notice (sub-section (6)).
If the information is not given in time or is unsatisfactory, the company applies to the Tribunal within fifteen days after the notice period expires for an order restricting transfer and suspending rights attached to the shares (sub-section (7)). The Tribunal may make a restricting order within sixty days of the application or such other period as may be prescribed (sub-section (8)). The company or an aggrieved person may apply within one year to relax or lift the restrictions; if no such application is filed within that year, the shares are transferred without restrictions to the authority constituted under section 125(5) (sub-section (9)).
Penalties and false declarations
An individual who fails to declare is liable to a penalty of fifty thousand rupees, plus one thousand rupees a day for continuing failure, up to two lakh rupees (sub-section (10)). A company that fails to maintain the register, file the return, take steps under sub-section (4A) or allow inspection is liable to a penalty of one lakh rupees, plus five hundred rupees a day, up to five lakh rupees; each officer in default is liable to twenty-five thousand rupees, plus two hundred rupees a day, up to one lakh rupees (sub-section (11)). Wilfully false, incorrect or suppressed information in a declaration attracts action under section 447 (sub-section (12)).
Practical preparation
Map the shareholding chain up to individuals, including trusts and persons resident outside India. Collect declarations, update the register and file the return within the prescribed time. Send sub-section (5) notices where ownership is unclear, track the thirty-day reply window, and diary the fifteen-day Tribunal deadline.
G.S.R. 463(E) of 5 June 2015 lists section 90 among provisions that shall not apply to Government companies. That notification predates the 2018 substitution of section 90, so confirm the current position before relying on it. Paragraph 2A, inserted by G.S.R. 582(E) of 13 June 2017, applies the exceptions in G.S.R. 463(E) only to a Government company that has not committed a default in filing its financial statements under section 137 or its annual return under section 92 with the Registrar. The later amendments to G.S.R. 463(E), S.O. 802(E) of 23 February 2018 and G.S.R. 151(E) of 2 March 2020, do not change the section 90 entry.
Practical checklist
Do
- Trace indirect holdings through companies, trusts and other entities to the individual.
- Keep a dated file of every notice, reply and Tribunal step.
Avoid
- Do not treat a nominee shareholder as the end of the enquiry.
- Do not miss the fifteen-day window to approach the Tribunal after an unanswered notice.
Illustrative example
Hypothetical: holding through a foreign trust
A company’s largest shareholder is a body corporate controlled by a trust outside India. Its beneficiary has not declared anything.
Identify
The company takes steps under sub-section (4A) and maps the chain to the beneficiary.
Notice
It issues a sub-section (5) notice; the reply window is thirty days.
Escalate
If no satisfactory reply comes, it applies to the Tribunal within fifteen days.
Outcome
- The company has evidence of its own compliance and can ask the Tribunal to restrict the shares.
Glossary
- Significant beneficial owner
- The individual described in section 90(1): holding the threshold beneficial interest, or the right to exercise or actual exercise of significant influence or control.
- Significant influence or control
- The concept defined in clause (27) of section 2, to which section 90(1) refers.
Frequently asked questions
Is twenty-five per cent. the only threshold?
No. Section 90(1) says twenty-five per cent. or such other percentage as may be prescribed. Check the current Companies (Significant Beneficial Owners) Rules, 2018.
What if a suspected owner does not respond?
After the thirty-day period, the company applies to the Tribunal within fifteen days for an order restricting the shares.
What happens to restricted shares if nobody applies to lift the restrictions?
If no application is filed within one year of the Tribunal’s order, the shares are transferred without restrictions to the authority constituted under section 125(5).
Need help applying this provision to your situation?
Contact BizeneedLast updated 11 October 2026