Companies Act 2013 Section 90: Significant Beneficial Owners (2026)
What Section 90 of the Companies Act, 2013 does: it makes companies find and record the real human owners behind the shares, called significant beneficial owners (SBOs), through the BEN-1 declaration and the BEN-2 return. Last verified October 2026.
Explainer · Company Law · Companies Act 2013
Section 90 of the Companies Act, 2013 is the law that makes a company find out who the real human owners behind its shares are, and write their names in a register. These people are called significant beneficial owners, or SBOs. The idea is simple: shares are often held by other companies, trusts or partnerships, so the person who actually controls the company can stay hidden. Section 90, read with the Significant Beneficial Owners Rules, 2018, pulls that person into the open. This explainer sets out what Section 90 says, how the BEN-1 and BEN-2 forms work, what the Tribunal can do, and why it matters. Last verified October 2026.
- What it is: Section 90 of the Companies Act, 2013 requires a register of significant beneficial owners, the real human owners behind the shares.
- Forms: the SBO declares in BEN-1, the company keeps the register in BEN-3 and files the return in BEN-2, and can issue a BEN-4 notice.
- Threshold: broadly a 10 per cent beneficial interest or significant influence or control, as prescribed by the SBO Rules, 2018.
- Teeth: the NCLT can freeze the shares, and there are fines and in some cases imprisonment for non disclosure.
01The short answer
Section 90 of the Companies Act, 2013 is titled "Register of significant beneficial owners in a company". It does two things. First, every individual who is a significant beneficial owner (SBO) must declare that fact to the company. Second, the company must keep a register of these owners and file a return of SBOs with the Registrar of Companies.
The current Section 90 was substituted by the Companies (Amendment) Act, 2017 and came into force on 13 June 2018, with the detailed rules in the Significant Beneficial Owners Rules, 2018. It is a transparency and anti money laundering tool, aimed at the real person hiding behind layers of companies and trusts.
02What Section 90 says
In plain terms, Section 90 lays down a chain of duties:
- An individual who is a significant beneficial owner must file a declaration with the company in Form BEN-1.
- The company must keep a register of SBOs and allow members to inspect it.
- The company must file a return of SBOs with the Registrar in Form BEN-2.
- The company can serve a notice in Form BEN-4 on any person it believes is, or knows about, an SBO, asking for information.
- If a person does not reply or gives an unsatisfactory reply, the company can apply to the National Company Law Tribunal, which can order a freeze on the shares.
One line to remember
Section 90 forces the real human owner out of the shadows and onto a register, and gives the company and the Tribunal tools to act if that person will not come forward.
03Who is a significant beneficial owner
An SBO is an individual, a living person, who alone or together with others holds a significant stake or control in a company without appearing as the direct registered shareholder. The Significant Beneficial Owners Rules, 2018 set the main test at a beneficial interest of not less than 10 per cent in the shares of the company, or the right to exercise or the actual exercise of significant influence or control.
The rules also lay down how to trace the owner up through holding bodies, such as another company, a partnership firm, a trust or a pooled investment vehicle. Because the stake is held indirectly, the register of members alone does not show the SBO, which is exactly the gap Section 90 is meant to close.
04How the process works
The flow runs from the person to the company to the Registrar.
| Step | Form | Who acts |
|---|---|---|
| SBO declares the beneficial interest | BEN-1 | The significant beneficial owner |
| Company keeps the register of SBOs | BEN-3 | The company |
| Company files the return with the Registrar | BEN-2 | The company |
| Company asks a suspected SBO for information | BEN-4 | The company |
Once an SBO files BEN-1, the company records it in the register (Form BEN-3) and files the return (Form BEN-2) with the Registrar within the time the rules allow. If the company thinks someone is an SBO but has not declared it, it serves a notice in BEN-4 seeking the information.
05Powers of the company and the Tribunal
Section 90 has teeth. If a person who gets a BEN-4 notice does not give the information, or gives a reply the company is not satisfied with, the company can apply to the National Company Law Tribunal (NCLT). The Tribunal can order restrictions on the shares in question, which may include a freeze on the transfer of the shares, a suspension of the right to receive dividend, and a bar on voting rights, until the owner complies.
Section 90 also carries penalties. There are fines, and in some cases imprisonment, for failing to declare SBO status, for giving false or incomplete information, and for the company failing to keep the register or file the return. The aim is to make non disclosure costly.
06Why it matters
Section 90 matters most in due diligence, investigation and compliance. If you are checking who really controls a company, before an investment, a loan, an acquisition or a dispute, the SBO register and the BEN-2 return are the official record of the human owner. They are used alongside the MCA company search and the wider company due diligence checklist.
For a company secretary or compliance team, Section 90 is a recurring filing duty, and missing it draws penalties and NCLT action. For a litigant or investigator, an SBO dispute, a freeze order, or a prosecution under Section 90 can itself become a matter before the NCLT or a court, which is why tracking those proceedings is useful.
07Where Claw fits
Claw is an all-in-one legaltech platform for Indian advocates, law firms, and corporate legal teams, combining AI-based case search, an AI legal assistant (Legal GPT), case management, and compliance automation across all Indian courts and tribunals.
Section 90 questions often turn into proceedings: a company applying to the NCLT for a freeze on shares, a challenge to a BEN-4 notice, or a prosecution for non disclosure. Claw lets you search more than 30 crore judgments, with Supreme Court decisions from 1950 and High Court decisions from 1990, to see how tribunals and courts have read "significant beneficial owner", "significant influence" and the freeze power, with results in under 5 seconds. You can also track a live matter, with its orders and hearings, by company or party name across 9,102 courts, benches and forums, so you follow an SBO dispute without scanning cause lists by hand. Claw does not use the documents you upload to train its AI models.
Create a FREE Claw account to track any Section 90 or SBO matter by party name and follow every hearing, and use case search across Indian courts to find how courts have applied the SBO rules.
08Sources and further reading
- India Code (Companies Act, 2013, bare text): indiacode.nic.in
- Ministry of Corporate Affairs (SBO Rules and forms): mca.gov.in
- PRS Legislative Research (Companies Act amendments): prsindia.org
- Claw: clawlaw.in
This explainer is general information, not legal advice. Thresholds, forms and penalties under Section 90 and the SBO Rules can change, so check the current text and take advice from a company secretary or counsel before you act.
09Frequently asked questions
What is Section 90 of the Companies Act, 2013?
Section 90 requires every individual who is a significant beneficial owner (SBO) in a company to declare the beneficial interest, and requires the company to keep a register of SBOs and file a return with the Registrar. It is meant to reveal the real human owner behind layers of companies and trusts.
Who is a significant beneficial owner?
Broadly, an individual who alone or with others holds not less than 10 per cent beneficial interest in the shares of a company, or who has the right to exercise or actually exercises significant influence or control, without appearing as the direct registered shareholder. The exact tests are in the SBO Rules, 2018.
What are Forms BEN-1, BEN-2 and BEN-4?
BEN-1 is the declaration the SBO files with the company. BEN-2 is the return the company files with the Registrar. BEN-4 is the notice the company serves on a person it believes is, or knows about, an SBO who has not declared.
What happens if an SBO does not declare?
The company can serve a BEN-4 notice and, if the reply is missing or unsatisfactory, apply to the National Company Law Tribunal. The Tribunal can restrict the shares, including freezing transfer, suspending dividend and barring voting rights. There are also fines and in some cases imprisonment.
Is Section 90 affected by the new criminal codes?
No. The Bharatiya Nyaya Sanhita, Bharatiya Nagarik Suraksha Sanhita and Bharatiya Sakshya Adhiniyam replaced the IPC, CrPC and Evidence Act. They do not renumber the Companies Act, 2013, so Section 90 keeps its number.
Can I track a Section 90 or SBO case in Claw?
Yes. Claw lets you search more than 30 crore judgments on significant beneficial ownership with results in under 5 seconds, and track a live NCLT or court matter by party name across 9,102 courts, benches and forums. It researches and tracks the matter but does not give legal advice.