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Last updated: July 19th, 2024 2:38 PM

Form BEN-2

Form BEN-2 is a key document introduced by the Companies Act of 2013, designed to enhance transparency in Indian corporations. It requires companies to report information about Significant Beneficial Owners (SBOs)—individuals or entities that hold a significant stake in a company, either directly or indirectly. This form helps reveal companies' true controllers, ensuring that the actual ownership is clear and transparent to regulatory authorities. IndiaFilings experts are ready to guide you through your MCA compliance requirements! [shortcode_81]

What is BEN 2 Form?

Form BEN-2 is a regulatory document required by the Companies Act 2013, which mandates every company to file a declaration about its Significant Beneficial Owners (SBOs) with the Registrar of Companies (RoC). The purpose of this form is to disclose the identities of individuals or entities that exercise significant control over the company through shareholding or voting rights. Specifically, it targets those holding, directly or indirectly, not less than 10% of the company's shares or voting rights. This declaration is essential for maintaining transparency in the corporate structure, as it reveals who truly holds significant influence within the company. It must be filed within 30 days whenever significant beneficial ownership is acquired or any changes to existing interests.

Definition of Significant Beneficial Owner (SBO)

A Significant Beneficial Owner (SBO) is defined under Section 90(1) of the Companies Act, 2013, as an individual or entity that, either alone or together with others, directly or indirectly, holds substantial rights or entitlements in a company. These rights or entitlements must include one or more of the following aspects to qualify someone as an SBO:

Shareholding: The SBO holds at least 10% of the company’s shares, whether directly or combined with indirect holdings.
Voting Rights: The SBO possesses, directly or indirectly, 10% or more of the voting rights in the company.
Dividends and Distributions: The SBO has the right to receive or participate in at least 10% of the total distributable dividend, or any other distribution, in a financial year through indirect holdings alone or in conjunction with direct holdings.
Significant Influence or Control: The SBO has the capacity to exercise, or actually exercises, significant influence or control over the company in ways other than through direct shareholdings.
Significant (Indirect) Control: The SBO exercises control through one or more layers of companies or entities that ultimately control the reporting company.
Significant (Indirect) Influence: The SBO has influence over entities that, in turn, have a significant influence on the operations or management of the reporting company.

BEN 2 Form Applicability

Filing of Form BEN-2 is applicable to all companies that have Significant Beneficial Owners (SBOs). However, Section 90 of the Companies Act 2013 provides exemptions for certain transactions.

Exemptions from Filing BEN 2 Form

Form BEN-2 is generally required for companies to disclose details about their Significant Beneficial Owners (SBOs). However, certain transactions and ownership structures are exempt from this filing requirement under Section 90 of the Companies Act, 2013:

Trusts, Executors, and Administrators: Shares or rights held in the capacity of a trustee, executor, or administrator are exempt.
Court Orders: Transactions involving the transfer of shares or rights under a court order or decree.
Regulated Investment Vehicles: Shares held by investment vehicles such as mutual funds, venture capital funds, and other entities regulated by SEBI.
Corporate Structures: SBOs holding shares through another body corporate or within a group structure involving subsidiaries and holding companies.
Foreign Nominee Shareholders: Shares or rights held by nominee shareholders on behalf of foreign entities in compliance with foreign investment regulations.

Non-Applicability of Filing Form BEN 2

In addition to the above exemptions, there are specific entities for whom the requirement to file Form BEN-2 does not apply at all:

Government and Regulatory Bodies: Shares held directly by Central or State Governments, local authorities, or entities controlled by them.
SEBI-Registered Investment Vehicles: This includes mutual funds, AIFs, REITs, and InvITs regulated by the Securities and Exchange Board of India (SEBI).
Other Regulatory Bodies: Entities regulated by the Reserve Bank of India (RBI), Insurance Regulatory and Development Authority of India (IRDAI), or Pension Fund Regulatory and Development Authority (PFRDA).
Investor Education and Protection Fund Authority (IEPF): Shares held by the IEPF Authority.

Purpose of filing the Form BEN 2

The purpose of filing BEN Form 2 is multifaceted and centred around the disclosure and management of significant beneficial ownership. Here are the specific reasons for filing Form BEN-2:

Declaration of Significant Beneficial Ownership
Updates on Changes in Significant Beneficial Ownership
Compliance with Section 90 of the Companies Act, 2013
Transparency in Corporate Ownership Structures

Details Required for Filing BEN-2

The data fields required to be filled in Form BEN-2 are:

Corporate Identification Number (CIN)of the Company
Registered Name of the Company
Email ID of the Company
Registered Office Address of the Company
The purpose for which the form was filled is:
- To declare the significant beneficial ownership in the company
- To declare any change in the significant beneficial ownership of the company
- To declare the holding reporting company CIN of the holding reporting company
- The form requires specifying the number of members through which any indirect holding or right in reporting company is being exercised.
It also requires declaring the details of the member of such shares, that is, how such shares are held by the member either indirectly or with any direct holding or right to such holding.
How the member holds such shares may be through one or more of the below-mentioned:
- Holding shares
- Holding voting rights in shares
- Holding rights on distributable dividends or any other distribution
- By way of exercise of control
- By way of exercise of significant influence
The following basic details are required regarding the member:
- Type of member
- Name of the member
- Corporate Identification Number (CIN) or Foreign Company Registration Number (FCRN) or Limited Liability Partnership Identification Number (LLPIN) or any such registration number of the member
- Address of the member
- Email ID of the member
- Date of entry of name in the register of members as per Section 88
- Status of the Significant Beneficial Owner (SBO)
The form also requires disclosing if the SBO has any stake in the member of the reporting company or Ultimate Holding company of the member of the reporting company, along with the CIN or FCRN or any such registration number of such company and name of the ultimate Holding company.
Details regarding the SBO, if it is a partner of the member or holds the majority stake in the body corporate partner or holds the majority stake in the ultimate holding company of the body corporate member, along with the CIN or FCRN or any such registration number of such company and name of the ultimate Holding company/ body corporate partner.
Particulars of the Significant Beneficial Owner like:
- Name
- Father’s Name
- Date of Birth
- Nationality
- Income Tax Personal Identification Number (PAN)
- Passport Number
- Address
- Email ID of the SBO
- Date of acquiring such significant Beneficial Interest
Date of receipt of the declaration by the company in Form No. BEN-
The declaration in Form no BEN-1 and agreements, if any, to support the exercise of control and significant influence are the attachments to be included in this form.
The Board of Directors has to pass a resolution to authorize any person to sign and submit this form.
This form is digitally signed by the authorized person.

On receipt of the declaration by the Beneficial Owner, inform No. BEN-1, the company is required to file a return in Form No. BEN-2 and the fees as may be prescribed in Companies (Registration Offices and Fees) Rules 2014, with the Registrar within 30 days from the date of receipt of Form No. BEN-1.

Consequences and Penalties for Not Filing Form BEN 2

In Case of Registered Member & Beneficial Owner: If any person (both the registered member and beneficial owner) fails to file Form BEN-2, they shall be punishable with:

Description	Penalty
Initial Fine	Fine, which may extend to Rs. 50,000/-
Continuing Failure	Further fine of Rs. 1,000/- for every day during which the failure continues

In the Case of the Company: If the company and every officer in default fail to file Form BEN-2, they shall be punishable with:

Description	Penalty
Initial Fine	Fine which shall not be less than Rs. 500/- and may extend to Rs. 1,000/-
Continuing Failure	Further fine of Rs. 1,000/- for every day during which the failure continues

MCA Latest Update: Companies (Significant Beneficial Owners) Amendment Rules, 2024

The Ministry of Corporate Affairs of the Government of India issued a Companies (Significant Beneficial Owners) Amendment Rules, 2024 vide a notification on 15th July 2024, amending the Companies (Significant Beneficial Owners) Rules, 2018. This update, enacted under the authority of section 90 and sections 469 (1) and (2) of the Companies Act 2013, introduces significant changes, particularly regarding the filing requirements for Form BEN-2. The key changes introduced in the amendment regarding the substitution of Form No. BEN-2 focuses on enhancing the accuracy and ease of reporting significant beneficial ownership. Here is a detailed breakdown of the changes:

Substitution of Form BEN-2:

The amendment replaces the existing Form No. BEN-2 with a new form designed to simplify the process of declaring significant beneficial ownership and related changes. BEN 2 form download We have attached the updated Form BEN-2 for your reference, and you can download it here. [pdf-embedder url="https://www.indiafilings.com/learn/wp-content/uploads/2019/08/Form-No.-BEN-2.pdf" title="Form No. BEN-2"]

Detailed Breakdown of Form BEN-2:
- Company Information: This includes the company's Corporate Identity Number (CIN) and name and registered office address.
- Purpose of Filing the Form: This now includes declarations for holding a reporting company, significant beneficial ownership, changes in particulars, and changes leading to the removal of existing significant beneficial ownership.
Declaration of Significant Beneficial Ownership:
- The form includes detailed fields for declaring significant beneficial ownership under Section 90, such as the number of important beneficial owners and particulars of ownership. It also accommodates reporting any changes to existing ownership.
Change in Particulars:
- There are specific provisions for updating the particulars of existing significant beneficial owners. This includes details such as ID, name, and the date of changes in significant beneficial interest.
Cessation of Control:
- Fields are provided to declare the cessation of control or significant influence by the significant beneficial owner, along with the need to submit supporting documentation.
Direct or Indirect Holding Details:
- The form requires comprehensive details on how the significant beneficial interest is held, whether directly or indirectly. This includes information on shares, voting rights, distributable dividends, or significant influence.

Additional Compliance and Documentation:

The new form emphasizes the importance of comprehensive documentation and the necessity for authorized personnel to sign digitally. This ensures that the information provided is accurate and verified by a practising professional such as a Chartered Accountant, Cost Accountant, or Company Secretary. These changes aim to make the process of reporting and verifying significant beneficial ownership more transparent and efficient.

Fee Structure for Filing e form BEN 2

There is a fee for filing e-forms or documents if the company has a share capital.

Nominal Share Capital	Fee applicable
Less than 1,00,000	Rupees 200
1,00,000 to 4,99,999	Rupees 300
5,00,000 to 24,99,999	Rupees 400
25,00,000 to 99,99,999	Rupees 500
1,00,00,000 or more	Rupees 600

Fee for filing e-Forms or documents in case the company not have share capital Fee applicable: Rupees 200 Additional fee

Period of delays	All forms
Up to 30 days	Two 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

Procedure for Filing Form BEN-2

There are two methods for filing Form BEN-2 as part of the compliance with Section 90 of the Companies Act. Here is the setp by step process for filing Form BEN-2.

Option-1

Access MCA Homepage: Visit the Ministry of Corporate Affairs (MCA) website.
Login to MCA Portal: Enter valid credentials to log in to the MCA portal.
Select “MCA Services”: Navigate to the "MCA services" section and select "Company e-Filing".
Select “Compliance Services”: Choose the "Compliance Services" option from the menu.
Access “Form No. BEN-2”: Click on “Form No. BEN-2 (Return to the Registrar in respect of declaration under section 90)”.
Enter Company Information: Fill in the required company information fields.
Search CIN (optional): Use the search option to find the Corporate Identity Number (CIN).
Select CIN (optional): Choose the appropriate CIN from the dropdown list.
Fill Up the Application: Complete the form with all necessary details.
Save the Webform as a Draft (optional): Optionally, save your progress by saving the webform as a draft.
Submit the Webform: Submit the completed webform.
SRN Generation: Upon submission, a Service Request Number (SRN) is generated for future correspondence with MCA.
Affix the DSC: Digitally sign the form with a Digital Signature Certificate (DSC).
Upload the DSC-affixed PDF Document: Upload the signed PDF document on the MCA portal.
Pay Fees: Complete the payment process. Note: If the user does not successfully upload the DSC-affixed PDF within 15 days of SRN generation and complete the payment within 7 days of the successful upload of the DSC-affixed document or due date of filing of the webform + 2 days, whichever is earlier, the SRN will be cancelled.
Acknowledgement Email: Receive an acknowledgement email confirming the submission.

Option 2

Access MCA Homepage: Visit the MCA website.
Access Form No. BEN-2 through the Search Bar: Use the search bar on the MCA homepage to find Form No. BEN-2.
Login to MCA Portal: Enter your credentials to log in.
Enter Company Information: Fill in the required company information fields.
Search CIN (optional): Use the search option to find the CIN.
Select CIN (optional): Choose the relevant CIN from the dropdown list.
Fill Up the Application: Complete all necessary details in the form.
Save the Webform as a Draft (optional): Optionally save your progress by saving the Webform as a draft.
Submit the Webform: Submit the completed form.
SRN Generation: Receive a Service Request Number (SRN) upon submission for future correspondence.
Affix the DSC: Digitally sign the form with a DSC.
Upload the DSC-affixed PDF Document: Upload the signed PDF document on the MCA portal.
Pay Fees: Complete the payment process. Note: If the user does not successfully upload the DSC-affixed PDF within 15 days of SRN generation and complete the payment within 7 days of the successful upload of the DSC-affixed document or due date of filing of the webform + 2 days, whichever is earlier, the SRN will be cancelled.
Acknowledgement Email: Receive an acknowledgement email confirming the submission.

Important Considerations

Timeliness: Ensure timely submission of the form and associated documents to avoid penalties.
Accuracy: Double-check all entries for accuracy before submission.
Documentation: Keep all necessary documents and information ready to streamline the process.
Digital Signature Certificate (DSC): Ensure your DSC is valid and properly configured for use.

Details of other BEN Forms

Here’s a concise overview of the different BEN forms related to Significant Beneficial Ownership (SBO) under Section 90 of the Companies Act 2013:

Form BEN-1

Form BEN-1 is used by individuals or entities who hold or acquire significant beneficial ownership in company shares. This form serves two primary purposes:

Declaration of Ownership: Beneficial owners must declare their ownership status when they initially meet the criteria of holding significant stakes.
Changes in Ownership: Any changes in the extent or nature of the significant beneficial ownership must also be reported through this form.

Form BEN-3

Form BEN-3 is a register maintained by the company. This register contains detailed records of all declarations received related to Significant Beneficial Ownership. It is a crucial document for corporate compliance, ensuring that all information regarding the ownership and control of the company is up-to-date and accessible for regulatory review.

Form BEN-4

Form BEN-4 is a notice issued by the company to any person it believes to be a significant beneficial owner who has not yet declared their ownership via Form BEN-1. The company sends this notice requesting that the individual complete and submit Form BEN-1, providing the necessary declaration of ownership. The notice can be sent via post or email and must clearly state the company’s belief that the recipient is a significant beneficial owner. It also informs the recipient of their obligation to declare their ownership within 30 days of receiving the notice.

Key Compliance Points:

Deadline for Response: Upon receiving the BEN-4 notice, the beneficial owner has 30 days to respond by submitting Form BEN-1.
Consequences of Non-Compliance: If the beneficial owner fails to comply within the 30-day window, the company has the right to escalate the matter to the National Company Law Tribunal (NCLT) without further notice.

IndiaFilings experts can assist you with all your MCA compliance needs efficiently and effectively. [shortcode_81]