All about on e - Form BEN - 2 in FAQs Format

[Piyush Jain]

1. What is Form BEN – 2??

According to Section 90 of Companies Act, 2013; every company is required to file the declaration to the concerned RoC i.r.o. Significant Beneficial Owners of the company,

• Disclosing their interest in the company by way of : -

• shareholding or

• voting rights

Within 30 days of acquiring or changes in interest made by such beneficial owner in that company.

In simple words, Beneficial Owners are the shareholders holding Significant Beneficial Ownership (SBO) of not less than 10% of the shareholdings or voting rights of the company either directly or indirectly.

As per the notification issued by MCA on dated 29^th July, 2019, relaxation in fee and extension of filing BEN - 2 was announced. After a lot of representation received from many stakeholders on Significant Beneficial Owners – Second Amendment Rules, 2019, the time limit for filing of BEN – 2 form was extended to 30.09.2019.

But as per latest Circular issued by MCA on dated 24^th September, 2019, the time limit for filing of Form BEN-2 is extended upto 31-12-2019 (31^st December 2019) without any additional fee.

2. What is the definition of Significant Beneficial Owner (SBO)??

Significant Beneficial Owner means an individual referred to in section 90(1) of the Companies Act, 2013, who is 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 company, namely:-

1.  holds indirectly, or together with any direct holdings, more than or equal to 10% of the shares
2. holds indirectly, or together with any direct holdings, more than or equal to 10% of the voting rights in the shares;
3.  has right to receive or participate in more than or equal to 10% of the total distributable dividend, or any other distribution, in a financial year through indirect holdings alone, or together with any direct holdings;
4.  has the following: -
   1. Right to exercise, or actually exercises,
   2. Significant influence or control, in any manner other than through direct holdings alone.
   3. Significant (Indirect) Control: Control by owners through one or more layers of companies in Reporting Company.
   4. Significant (Indirect) Influence: Owner has influence in those entities, which influence Reporting Company.

3. Applicability of filing of form BEN 2 to RoC??

Filing of Form BEN – 2 is applicable on all Companies in which there are SBOs. But section 90 of Companies Act, 2013 provides exemptions to some transactions which are mentioned below for filing of Form BEN – 2 to the concerned RoC.

4. Non- applicability of filing of form BEN 2 to RoC??

Filing of Form BEN – 2 are not applicable to the extent the share of the reporting company if held by: -

1. The authority constituted under sub-section (5) of section 125 of the Act;

2. Its holding reporting company, Provided that the details of such holding reporting company shall be reported in Form No. BEN-2;

3. The Central Government, State Government or any local Authority;

4. A reporting company, or a body corporate, or an entity, controlled by the Central Government or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments;

5. Securities and Exchange Board of India registered Investment Vehicles such as mutual funds, alternative investment funds (AIF), Real Estate Investment Trusts (REITs), Infrastructure Investment Trust (InVITs) regulated by the Securities and Exchange Board of India,

6. Investment Vehicles regulated by Reserve Bank of India, or Insurance Regulatory and Development Authority of India, or Pension Fund Regulatory and Development Authority.

5. What are the fees for filing of form BEN 2 to ROC?? 

Following are the description of Fees on various circumstances: -

1. In case of company have share capital

Nominal Share Capital	Fees Applicable
Upto ₹ 1,00,000	₹ 200
₹ 1,00,000 to ₹ 4,99,999	₹ 300
₹ 5,00,000 to ₹ 24,99,999	₹ 400
₹ 25,00,000 to ₹ 99,99,999	₹ 500
More than or equal to ₹ 1,00,00,000	₹ 600

2. In case of company not have share capital - Fee applicable - Rupees  200 

3. Additional fee rules –

Period of Delays	Additional Fees Applicable
Up to 30 Days	2 times of Normal Fees
More than 30 Days and up to 60 Days	4 times of Normal Fees
More than 60 Days and up to 90 Days	6 times of Normal Fees
More than 90 Days and up to 180 Days	10 times of Normal Fees
More than 180 Days	12 times of Normal Fees

6. What are the consequences and penalty will be  imposed in case of not filing of form BEN 2??

In case of Registered Member & Beneficial Owner: -

If any person (both the registered member & beneficial owner) fails to do so shall be punishable with: -

1. fine which may extend to ₹ 50,000/- and

2. With a further fine of ₹ 1000/- for every day during which the failure continues.

In case of the Company: -

The Company & every officer in default shall be punishable with fine

1. which shall not be less than ₹ 500/- and

2. may extend to ₹ 1000/-and

3. with a further fine of ₹ 1000/- for every day during which the failure continues

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Author can be reached at 9873804109, 9868124109 or mail id: [email protected]