Global private equity (PE) funds are likely to be among those most affected by the beneficial ownership norms notified by the Ministry of Corporate Affairs under Section 90 of the Companies Act, 2013.
According to the new rules, a company can suspend control rights on its shares if the PE fund does not disclose the beneficial owner.
This has the potential to lead to disputes between companies and PE funds going forward, as companies can approach the National Company Law Tribunal if appropriate disclosures are not made. The filing date for identifying significant beneficial owners (SBOs) is September 11.
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