Every time a concept is introduced, there is both a good and a bad use of it. Same is the case with the concept of beneficial ownership. Money laundering, illegal activities are the terms associated with the exploitation and wrong use of this concept.
Now let us understand, what is significant beneficial ownership?
Definition of 'Beneficial Interest': As per the newly notified Section 89(10) of the Act, beneficial interest in the shares of a company includes, directly or indirectly, through contract or otherwise, the right of a person to exercise rights attached to such shares or receive or participate in any dividends or other distribution in respect of the shares.
Mr. A holds shares of XYZ Private Limited. However, Name of Mr. B entered into register of members as registered member. In this case Mr. A is beneficial owner of Shares of XYZ Pvt Ltd. But the Mr. B name mentioned in Registered of Members. 
Section 90 of the Companies Act, 2013 read with the Companies (Significant Beneficial Owner) Rules, 2018 are notified with a purpose to ensure sufficient, accurate and timely information on the beneficial ownership of companies to the regulatory authorities. The purpose of this ordinance is to ensure that the person who is actually the owner and who is behind the curtains is disclosed, so that he cannot use this power for any illicit purpose.
Every individual who, either by himself or with others (including a trust and persons resident outside India), directly or indirectly, holds the beneficial interest of at least 10% in shares of the company or has the right to exercise significance influence or control over a company, shall make a declaration to that company specifying the nature of his beneficial interest (Significant Beneficial Owner (SBO)). Every significant beneficial owner shall file a declaration in Form No. BEN-1 to the company in which he holds the significant beneficial ownership on the date of commencement of these rules within 90 days from the date of commencement of the rules (11 September 2018) and within 30 days in case of any change/acquisition of SBO.
The Ministry of Corporate Affairs has provided a lower threshold limit for the determination of the SBO through the Final Rules on SBO, issued by MCA on June 14, 2018, according to which-"significant beneficial owner means an individual referred to in sub-section (1) of section 90 (holding ultimate beneficial interest of not less than ten per cent.) read with sub-section (10) of section 89, but whose name is not entered in the register of members of a company as the holder of such shares, and the term 'significant beneficial ownership' shall be construed accordingly;" Therefore, now the threshold limit for determination of SBO has been reduced to 10 %. 
The companies are also required to maintain a register for beneficial ownership and seek timely information from the respective individual. File returns with the Registrar and initiate NCLT sanctions on non-compliant SBOs. The deadline for every SBO to submit mandatory declaration has been set for 11 Sep 2018.
Why this disclosure is particularly important? because, it will help a company to determine who actually influences the company and who is the member for name sake? We can take examples of multiple cases which are going around us, whether it is Sahara case or Satyam case, the commonality which we can infer is, there was lack of transparency and awareness amongst the members or shareholders of the company.
Transparency is an essential feature for Business. It builds trust and higher ethical standards. When transparency is added to the corporate culture, the investor or the concerned party will be more engaged and faithful to the vision of the company
According to a recent study by Label Insight, up to 94% of consumers surveyed indicated that they were more likely to be loyal to a brand that offers transparency, while 73 percent said they were willing to pay more for a product that offers complete transparency.
Now the rule for significant beneficial owner not only brings transparency in the system, as to who is the real owner but also, protects any illicit use of the power of the actual shareholder and to promote good corporate governance. It will bring out the face of the real owner and he will be held accountable for his any unethical use of the power if any. Also the interest of the beneficial owners will also be protected by keeping them and their need in the mind while taking any decision.
Not for nothing Louis Vincent Gerstner Jr. has said that "The real mechanism for corporate governance is active involvements of the owner." So in the present case, the owners at least can disclose their names and hold accountability for their influences, good or bad.
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