Significant Beneficial Owners explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Since November 2023, a limited liability partnership has had to identify the individuals who hold significant beneficial interests in it, keep a register of them and file a return with the Registrar. The duty comes from the Limited Liability Partnership (Significant Beneficial Owners) Rules, 2023, which apply section 90 of the Companies Act, 2013 to LLPs through a notification of 2022. This guide goes through the Rules, as published in the Gazette (G.S.R. 832(E), dated 9 November 2023), and compares them with the company rules. Later amendments should be checked.
The Rules, made under section 79 of the LLP Act, 2008, apply to any limited liability partnership and came into force on publication. A significant beneficial owner is an individual who holds, directly or indirectly, not less than ten per cent of the contribution, of the voting rights in management or policy decisions, or of the distributable profits, or who has the right to exercise, or actually exercises, significant influence or control other than through direct holdings alone. The LLP must identify him, cause him to file Form LLP BEN-1, file Form LLP BEN-2 with the Registrar within thirty days of receiving it, and keep the register in Form LLP BEN-3.
The legal basis
The Rules say they are made "in exercise of the powers conferred by section 79 of the Limited Liability Partnership Act, 2008", which gives the Central Government power to make rules for carrying out the provisions of the Act. Rule 3(1)(g) defines "notification" as notification G.S.R. 110(E), dated 11 February 2022; the "reporting limited liability partnership" is an LLP required to comply with section 90 of the Companies Act, 2013 as modified by that notification, and "section" includes a section of the Companies Act as modified by it. The notification itself is not among the texts read for this article; it is named as rule 3(g) names it. Rule 2: the Rules apply to any LLP. Rule 1(2): they came into force on the date of publication in the Official Gazette.
If you are an LLP partner or manage an LLP's filings, see our LLP annual filing service.
Who is a significant beneficial owner: rule 3(1)(k)
An individual who, acting alone or together or through one or more persons or trust, possesses one or more of these in the reporting LLP:
- holds indirectly, or together with any direct holdings, not less than ten per cent of the contribution;
- holds indirectly, or together with any direct holdings, not less than ten per cent of the voting rights in respect of the management or policy decisions;
- has the right to receive or participate in not less than ten per cent of the total distributable profits, or any other distribution, in a financial year through indirect holdings alone or together with direct holdings;
- has the right to exercise, or actually exercises, significant influence or control, in any manner other than through direct holdings alone.
Explanation I: if an individual holds no right or entitlement indirectly, he is not a significant beneficial owner. Explanation II: a right is held directly if the contribution is in the individual's name, or he holds a beneficial interest declared under rule 22B(2) of the LLP Rules, 2009 and has made the declaration to the LLP. Explanation III lists when an individual holds a right indirectly through a partner of the LLP: where the partner is a body corporate (other than an LLP) in which he holds a majority stake, or in the ultimate holding company of which he holds a majority stake; where the partner is a Hindu undivided family and he is the karta; where the partner is a partnership entity and he is a partner or holds a majority stake in a body corporate partner or its ultimate holding company; where the partner is a trust and he is the trustee (of a discretionary or charitable trust), a beneficiary (of a specific trust) or the author or settlor (of a revocable trust); and certain pooled investment vehicles. Explanation V deems individuals acting with a common intent under an agreement to be "acting together". "Majority stake" in rule 3(1)(f) includes more than one-half of the contribution in a partnership entity. "Control" in rule 3(1)(c) includes the right to appoint a majority of the designated partners or to control management or policy decisions; "significant influence" in rule 3(1)(l) is the power to participate in financial and operating policy decisions but not control or joint control.
Rule by rule
| Rule | Duty | Time limit as printed | Form |
|---|---|---|---|
| 4(1) | The reporting LLP takes necessary steps to find out whether any individual is an SBO, identifies him and causes him to make a declaration | None stated | Form LLP BEN-1 |
| 4(2) | Where a partner other than an individual holds not less than ten per cent of contribution, voting rights or distributable profits, the LLP gives notice to that partner seeking information | None stated | Form LLP BEN-4 |
| 5 | The SBO declares to the LLP | Existing SBOs: within ninety days from commencement; later: within thirty days of acquiring the interest or of any change | Form LLP BEN-1 |
| 6 | The LLP files a return with the Registrar, with the fees prescribed in the LLP Rules, 2009 | Within thirty days from the date of receipt of the declaration | Form LLP BEN-2 |
| 7 | The LLP maintains a register; open for inspection during business hours, not less than two hours on every working day as decided by the LLP agreement or the partners, on a fee not exceeding fifty rupees per inspection | As stated | Form LLP BEN-3 |
| 8 | Notice seeking information under section 90(5) as applied | As the notice states | Form LLP BEN-4 |
| 9 | The LLP applies to the Tribunal where a person fails to give the information or it is not satisfactory, for an order restricting transfer of interest, suspending the right to receive profits or distributions, suspending voting rights, or other restrictions | Under section 90(7) as applied | Not a form |
| 10 | The Rules do not apply to the extent contribution is held by the Central Government, a State Government or a local authority; entities they control; SEBI-registered investment vehicles such as mutual funds, AIFs, REITs and InvITs; and vehicles regulated by the RBI, IRDAI or PFRDA | As stated | None |
The form headings are as printed: Form LLP BEN-1 is the declaration by the beneficial owner who holds or acquires significant beneficial ownership in contribution (pursuant to section 90(1) of the Companies Act and rule 5); Form LLP BEN-2 is the return to the Registrar in respect of the declaration (section 90(4), rule 6); Form LLP BEN-3 is the register of beneficial owners holding significant beneficial interest (section 90(2), rule 7(1)); Form LLP BEN-4 is the notice (section 90(5), rules 4, 8 and 9).
Contrast with the company SBO rules
| Point | Company SBO Rules, 2018 | LLP SBO Rules, 2023 |
|---|---|---|
| Subject of the holding | Shares, voting rights, distributable dividend | Contribution, voting rights in management or policy decisions, distributable profits |
| Intermediary tested | A member of the reporting company | A partner of the reporting LLP, including a partnership entity |
| Duty to identify | Rule 2A | Rule 4 |
| Declaration | Form BEN-1; return Form BEN-2; register Form BEN-3 | Form LLP BEN-1; return Form LLP BEN-2; register Form LLP BEN-3 |
| Designated person | Rule 9(4) to (8) of the Management and Administration Rules (company secretary, KMP or every director) | Rule 22B(4) of the LLP Rules, 2009 (a designated partner), see our article on the LLP register of partners |
| Legal base | Section 90 of the Companies Act directly | Section 79 of the LLP Act, section 90 of the Companies Act as modified by the 2022 notification |
For the company side, see our article on significant beneficial owner rules for companies and the overview of beneficial ownership.
A different duty: declaration of beneficial interest in contribution
The LLP (Third Amendment) Rules, 2023 (G.S.R. 803(E)) separately insert rule 22B in the LLP Rules, 2009: a registered partner who holds no beneficial interest in contribution declares that in Form 4B within thirty days, and a beneficial partner not in the register declares in Form 4C within thirty days; the LLP files a return in Form 4D within thirty days of receipt. That is a declaration of beneficial interest, a different duty from the SBO declaration. See our article on the LLP register of partners.
Worked example (invented names)
Zephyr Design LLP has a corporate partner, Zephyr Holdings Private Limited, which holds 40 per cent of the contribution. Mr Rohan Pai holds a majority stake (more than half) of Zephyr Holdings. Under Explanation III(i)(a), Mr Pai holds a right indirectly in the LLP through that partner. Through Zephyr Holdings he is at the indirect ten per cent test: 40 per cent is not less than ten per cent. The LLP gives notice in Form LLP BEN-4 to the corporate partner (rule 4(2): a partner other than an individual holding at least ten per cent), causes Mr Pai to file LLP BEN-1, files LLP BEN-2 within thirty days of receiving it, and records him in the register in LLP BEN-3.
Common mistakes
- Treating the LLP SBO Rules as optional because the LLP is small; rule 2 applies to any LLP.
- Waiting for declarations instead of acting under rule 4.
- Missing the thirty-day LLP BEN-2 filing.
- Confusing the SBO declaration with the rule 22B declaration of beneficial interest.
- Not recording the register in LLP BEN-3 with inspection facilities.
Need help with LLP SBO compliance?
We can map the LLP's partners and their ultimate owners, send the notices and file the returns. See our LLP annual filing service.
Key takeaways
- The Rules apply to any LLP and came into force on publication.
- An SBO holds at least ten per cent indirectly or has significant influence or control.
- LLP BEN-1 within thirty days of acquiring or changing; LLP BEN-2 within thirty days of receipt.
- The LLP keeps a register in LLP BEN-3.
- The rule 22B declaration is a separate duty.
Read next
- Significant Beneficial Owner Rules for Companies as Amended
- LLP Register of Partners Under Rule 22A
- Beneficial Ownership and SBOs Under the Companies Act
- Rules 21 and 22: LLP Agreement Filing and Changes in Partners
Disclaimer: Based on the Companies Act, 2013 in the Ministry of Corporate Affairs consolidated text (last updated 29 July 2022), the Rules as consolidated in the Ministry's e-book and the other official texts named in this article, including the LLP Act, 2008 and the LLP Rules as published, as consulted on 3 October 2026. Later amendments, notifications, circulars, forms and fees should be checked. Formats are general drafts to be adapted to the company's articles and facts. This article is general information, not legal advice; check the official text before acting.