Is the concept of Significant Beneficial Owner (SBO) applicable to Limited Liability Partnerships (LLPs)? What are the criteria for identifying an SBO in the context of an LLP?

Yes, the concept of Significant Beneficial Owner (SBO) is applicable to Limited Liability Partnerships (LLPs). The Ministry of Corporate Affairs (MCA) notified the Limited Liability Partnership (Significant Beneficial Owner) Rules, 2023 (SBO Rules) on November 9, 2023. These rules, conferred under section 79 of the Limited Liability Partnership Act, 2008, aim to regulate and identify significant beneficial owners in Limited Liability Partnerships (LLPs) similar to companies under the Companies Act, 2013. In relation to a reporting LLP means an individual who acting alone or together or through one or more persons or trust, possesses one or more of the following rights or entitlements in such reporting LLP, namely - Contribution Criterion: holds indirectly or together with any direct holdings not less than 10% of the contribution; Voting right criterion: holds indirectly or together with any direct holdings, not less than 10% of the voting rights in respect of the management or policy decisions in such LLP; Profit sharing criterion: has right to receive or participate in not less than 10% of the total distributable profits or any other distribution, in a financial year through indirect holdings alone or together with any direct holdings; Significant Influence or Control: has right to exercise or actually exercises significant influence or control, in any manner other than through direct-holdings alone.