Significant beneficial owners face strict action

New Delhi, Feb. 10: Significant beneficial owners in corporates might face strict action for inadequate or wrong disclosures about their ownership and companies too can seek action against entities in case they fail to provide satisfactory responses, according to rules.

With the corporate affairs ministry amending the rules for significant beneficial owners under the Companies Act, 2013, corporates are required to take necessary steps to identify such owners and obtain a declaration from them.

Significant beneficial owners, who fail to make a declaration regarding their ownership, could face fine, imprisonment or both under the Companies Act. In instances, where such entities have wilfully provided incorrect information, such acts would be considered as fraud under the Act.

Companies that fail to maintain registers of significant beneficial owners would also face action