Notification issued by MCA for rules on identifying and reporting Significant Beneficial Owners of LLPs.

Summary of the notification

• Significant Beneficial Owner (‘SBO’): An individual who acting alone or together or through one or more persons possess indirectly or together with any direct holdings, at least 10% of the contribution (OR) voting rights (OR) entitlement to profits (OR) exercises significant influence or control;
• For this purpose, in case, the partner of the LLP is a body corporate, then in that case, it will be the individual who owns the majority stake (i.e. holding more than one half of the equity share capital or voting rights or contribution) in such body corporate or in the ultimate holding company;
• In case, the partner is a partnership firm, then in that case, the partner of such firm (OR) in case where the partner of such firm is a body corporate, the individual who owns majority stake in such body corporate or in the ultimate holding company; 
• In case, the partner is a trust, trustee or beneficiary of the trust (based on the type of trust);
• In case, the partner is a pooled investment vehicle, then in that case, the general partner or investment manager or CEO of the investment manager (if investment manager is a body corporate);
• Requirement: The identified SBOs have to file a declaration in Form No. LLP BEN-1 to the LLP within 90 days from the commencement of these rules (i.e. from November 9, 2023) and within 30 days from the in case where there is any change in the significant beneficial ownership;
• If an Individual becomes a SBO or any change in SBO within 90 days of these rules coming into effect, they will be considered to have become a significantly beneficial owner or made the change on the 90th day. They will then have 30 days to file the required declaration;
• Duty of LLP: Identify if there is any individual who is a SBO and give notice to SBO in Form No. LLP BEN-4 seeking SBO to make a declaration in Form No. LLP BEN-1;
• Upon receipt of declaration, it shall file a return in Form No. LLP BEN-2 with ROC within 30 days of receipt of declaration from SBO and maintain a register of significant beneficial owners in Form No. LLP BEN-3.