Safeguarding Investments: Navigating Restriction on the Transfer of Promoters Shares
The Ministry of Corporate Affairs on November 9, 2023, has notified the Limited Liability Partnership (Significant Beneficial Owners) Rules, 2023 (“SBO Rules”). These SBO Rules now obligate LLP’s to ascertain whether an individual qualifies as an SBO.
Up until now, only companies were subjected to regulatory requirements concerning SBOs, but through this notification, the SBO Rules extend the compliance obligations to LLPs as well and they are now required to send notice to individuals to seek declarations and maintain records of SBOs, accessible for inspection to meet compliance standards.
Entities such as (i) Central Government or State Government or Local Authorities; (ii) Reporting LLPs or corporations or entities controlled by Central or State Governments; (iii) Investment vehicles registered and regulated by the Securities and Exchange Board of India; and (iv) Investment vehicles regulated by the Reserve Bank of India, or the Insurance Regulatory and Development Authority of India, or the Pension Fund Regulatory and Development Authority, are however exempted from the requirements under these SBO Rules.