IBBI proposes mandatory beneficial ownership disclosure for resolution applicants

The Insolvency and Bankruptcy Board of India (IBBI) has proposed mandatory disclosures of Beneficial Ownership by prospective resolution applicants (PRAs). This move is aimed at enhancing transparency and preventing the misuse of the “clean slate” immunity provided to corporate debtors following a successful resolution.

Key proposals for prospective resolution applicants (PRAs)

The regulator floated a Discussion Paper on November 6, 2025, in which it has been suggested a mandatory new draft format for every prospective resolution applicant (PRA) to file the following as part of their resolution plan:

• Statement of Beneficial Ownership: A format covering details of all natural persons who ultimately own or control the PRA, along with the shareholding structure and jurisdiction of each intermediate entity.
• Affidavit under Section 32A: A format stating whether the PRA is eligible or not eligible for the benefit of Section 32A of the Code.

Beneficial ownership disclosures

The draft template for beneficial ownership is modelled on the regulatory framework prescribed by the Reserve Bank of India (RBI) Master Direction – Know Your Customer (KYC) Direction, 2016. This ensures consistency with extant financial-sector regulations on identifying the ultimate natural person exercising ownership or control.

Definition highlights:

The term “beneficial owner” is construed in accordance with the RBI Master Direction. Briefly, the definitions include:

• Company: The natural person(s) who, alone or together, or through one or more juridical persons, has a controlling ownership interest (more than 10%) or exercises control through other means.
• Partnership Firm: The natural person(s) with more than 10% ownership or entitlement to capital/profits or who exercises control through other means.
• Trust: The author, trustee(s), and beneficiaries with 10% or more interest, as well as any other natural person exercising ultimate effective control.
• Unincorporated Association/Body of Individuals: The natural person(s) with more than 15% ownership or entitlement.

Exemption for listed entities:

Consistent with the RBI Master Direction, certain entities are proposed to be exempted from furnishing granular shareholder details where sufficient public disclosures of shareholding and control are already available. This includes:

• Entities listed on a stock exchange in India.
• Entities resident in notified jurisdictions and listed on stock exchanges in such jurisdictions.
• A subsidiary of such listed entities.

PRAs relying on this exemption must disclose the name and jurisdiction of the listed entity and provide references to the relevant public filings (e.g., SEBI LODR, Companies Act, 2013 filings).

Section 32A Affidavit

Section 32A provides immunity to the corporate debtor and its property from prosecution for pre-CIRP offences, provided there is a bona fide change in management and control to a non-ineligible person. The affidavit aims to ensure this benefit of the “clean slate” principle is not misused.

The draft affidavit requires the PRA to:

• Declare whether they are eligible or not eligible for the benefit of Section 32A.
• Provide a brief statement of facts demonstrating eligibility or ineligibility, including whether the PRA or any person in management/control is/was a promoter, related party, or subject to investigation/prosecution relating to the corporate debtor’s pre-CIRP offences.
• Affirm that none of the persons who will assume management or control of the corporate debtor are ineligible under clauses (a) or (b) of Section 32A(1) of the Code.

The IBBI is inviting comments from all stakeholders, including resolution applicants, creditors, insolvency professionals, and academics, on the draft templates. The comments must be submitted electronically by November 16, 2025. Comments can be submitted through the IBBI website under the ‘Public Comments’ section by selecting the relevant discussion paper.

Also See: IPs asked to file application before PMLA courts to seek restitution of assets attached by ED