Significant beneficial ownership rules: A net cast too wide and too soon

While their aim of curbing money laundering and terror funding is laudable, the manner in which the Rules are being implemented may counteract the govt's ease of doing business initiatives

The Ministry of Corporate Affairs notified significant beneficial ownership rules on June 13, 2018 in a move that created quite a furore in the Indian corporate ecosystem, placing stringent disclosure obligations on individuals holding a certain percentage of beneficial interest in Indian companies. The Rules aim to look through corporate layers to reveal individual shareholders who ultimately derive economic benefits from or control of a corporate entity in India.

Individuals directly or indirectly holding 10 per cent or more in the share capital of a company are obligated to disclose their identities by providing information to that company which, in