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SBO Compliance

Significant Beneficial Ownership (SBO) aims to uncover the real individuals who, directly or indirectly, own, control, or significantly influence a company or LLP. Governed by Section 90 of the Companies Act, 2013 and SBO Rules, 2018, a person is deemed an SBO if they hold (alone or jointly, directly or indirectly) at least 10% of shares, voting rights, distributable income, or have substantial influence over management or policy decisions. This ensures transparency by identifying the true beneficiaries behind complex legal entities, even when ownership is obscured through layered structures.

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SBO Compliance

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  1. SBO COMPLIANCE As global scrutiny of complex ownership rises, India is leading the fight against financial malpractices through robust Significant Beneficial Owner (SBO) compliance—ensuring transparency, accountability, and regulatory control. IMPORTANCE OF SBO COMPLIANCE Greater Transparency:SBO compliance exposes hidden ownership structures, fostering transparency and accountability in business. Combatting Financial Crimes:It helps prevent crimes like money laundering, terror financing, and tax evasion, aligning India with FATF norms. Investor Confidence:Clear ownership builds investor trust, making companies more attractive for genuine investments. Enforcement by Regulations:The RoC is enforcing SBO rules strictly, with heavy penalties signaling the government's firm regulatory stance. IMPACT ON BUSINESSES Increased Compliance Burden: LLPs and companies must invest time and resources to identify SBOs, maintain records, and file timely disclosures. Greater Due Diligence: Firms, especially in M&A deals, must thoroughly verify counterparties’ SBOs to avoid compliance pitfalls. Heightened Responsibility: Management faces pressure with mandatory SBO officers and severe penalties for lapses. Reputational Risk: Non-compliance can lead to fines, jail time, and damage to corporate reputation and investor trust. Global Alignment: A robust SBO regime aligns India with global AML standards, enhancing credibility and financial transparency. SKMC Global assists businesses in ensuring seamless SBO compliance through expert guidance, accurate disclosures, and end-to-end regulatory support. +91 989-125-5499 www.skmcglobal.com info@skmcglobal.com

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