LLPs to report about Significant Beneficial Owner to ROC
A Limited Liability Partnership Firm (LLP) will now have to report about Significant Beneficial Owners to the Registrar of Companies within 30 days of the date of declaration made by an individual about holding or acquiring that status.
The Ministry of Corporate Affairs has notified the Limited Liability Partnership (Significant Beneficial Owners) Rules, 2023 with effect from November 10. These include definition and timeline for reporting. The latest move signifies the intent to ascertain the true or “beneficial” owner’s interest in and control over the contributions made by the partners and individuals to the LLP.
According to the new set of rules, a “Significant Beneficial Owner” in an LLP means an individual who is acting alone or together or through one or more persons or trust, possesses one or more of four rights or entitlements namely (i) holds indirectly or together with any direct holdings, not less than 10 percent of the contribution; (ii) holds indirectly or together with any direct holdings, not less than 10 percent of voting rights in respect of the management or policy decisions; (iii) has right to receive or participate in not less than 10 percent of the total distributable profits, or any other distribution, in a financial year through indirect holdings alone or together with any direct holdings and (iv) has right to exercise or actually exercises, significant influence or control, in any manner other than through direct-holdings alone.
Every reporting LLP will be required to take necessary steps to find out if there is any individual who is a significant beneficial owner in its structure. Such an individual is required to give a declaration in Form No. LLP BEN-1 to the reporting LLP within 90 days from the commencement of new rules i.e., November 10. Once received, the firm will be required to submit the information to the Registrar of Companies within 30 days from the receipt of the declaration.
