BEN-2: Return of Beneficial Interest

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BEN-2: Return of Beneficial Interest

Every registered company is required to file Return of its Beneficial Owners or shareholders holding not less than 10% or more shares (which was initially 25%) or voting rights in the company. This is a one-time return for entire existing significant beneficial owner. It has to be filed again only when there is a change in existing significant beneficial owners.

 

Every company is mandated to identify all the shareholders who hold 10% or more beneficial interest in the company.  The said persons are called Significant Beneficial Owners (SBO). This is the obligation of the company to identify the SBOs and send intimation for disclosure of their interests. Further, the SBOs are bound to furnish the detailed disclosure within 90 days from commencement of new rule in prescribed Form BEN-1 and if the company finds any information disclosed by the SBO is false or incorrect then company can approach the NCLT.

Form BEN-2 shall be compulsorily filed within 30 days from declaration received from SBO. This form shall be signed by an authorised person selected through the resolution in the meeting of board of directors of the company and further certified by the professionals.

Particulars of BEN-2

  • Declaration by the holding reporting company
  • Declaration of significant beneficial ownership under section 90, Companies Act, 2013
  • Declaration of changes in Significant Beneficial Ownership under Section 90, Companies Act, 2013
  • Declaration of entry of SBO regarding holding of stake in ultimate company
  • Declaration of individuals having beneficial interest with following detailed disclosures:
    1. Name of member
    2. Type of member
    3. Member’s CIN/ FCRN/ LLPIN
    4. Address of member
    5. Email ID of member
    6. Date of Registration in the company
    7. Beneficial Owner’s status
  • Declaration and details of the number of shares available with the member including their holdings. The manner of holding may be any of the following:
    1. Shares of the company
    2. Voting rights
    3. Dividend or Distribution rights
    4. Controlling the management
    5. Significance influence
  • Declaration by SBO mentioning the following particulars:
    1. Name of SBO
    2. Nationality of SBO
    3. SBO’s father name
    4. Date of birth of SBO
    5. PAN no, passport no, email Id and address of the SBO
    6. Date of interest obtained in company
    7. Date of receipt of BEN-1 by company
    8. Certified copy of BEN-1 along with attached agreement

Required Forms

BEN-1: Every individual who is a significant beneficial owner in a reporting company, shall file a declaration in Form No. BEN-1 to the reporting company within ninety days from such commencement. Thereafter, every individual, who subsequently becomes a significant beneficial owner, or where his significant beneficial ownership undergoes any change shall file a declaration in Form No. BEN-1 to the reporting company, within thirty days of acquiring such significant beneficial ownership or any change therein.


BEN-3: Every company shall maintain a register in BEN-3 stating the details of Interest declared by individuals as above and changes therein. Such register shall include details of the individual such as name of an individual, date of birth, address, details of ownership in the company and such other details as may be prescribed.


The register shall remain open for inspection by any member during business hours, for at least 2 hours on working day on the payment of prescribed fees. Reasonable fees shall be charged for the purpose which should not exceed Rs. 50 per inspection. In case, a company fails to maintain the register as per the Form BEN-3 or fails to allow inspection, the company and every other defaulting officer of the company shall be punishable with fine which shall not be less than Rs. 10 Lakhs but which may extend up to Rs. 50 Lakhs and where the failure is a continuing one, a further fine is levied which may extend to Rs. 1000 per day of failure.


BEN-4: A company shall give notice in BEN-4 to any person (whether a member or not and who is not registered as a significant beneficial owner with the company) in the prescribed manner if the company knows or has reasonable cause to believe such person to be a significant beneficial owner or has knowledge of a significant beneficial owner or to any person whom the company believes or has reasonable cause to believe to have been a significant beneficial owner for three immediately preceding years from the notice.

Exemption from filing of Form BEN-2

  1. Central Government constituted authority
  2. Holding reporting company where details has already filed in BEN-2 by such reporting company.
  3. Central Government/ State Government/ Local Authority.
  4. Central Government/ State Government/ Local Authority controlled or constituted reporting company, body corporate or any other entity
  5. Investor Education and Protection Fund (IEPF) Authority
  6. Mutual Fund, Alternate Investment Fund, Real estate Investment Trusts and Infrastructure Investment Trusts which are registered and regulated by SEBI
  7. Insurance Regulatory and Development Authority (IRDA)
  8. Investment Vehicles regulated by RBI
  9. Pension Fund Regulatory and Development Authority

What’s Included

  • Drafting of BEN-1 for your SBO
  • One-time creation of BEN-3
  • Filing of BEN-2 with ROC
  • ROC fees not included

Documents Required

  1. List of members of the company with details:
    1. Type of membership
    2. Names of the members
    3. CIN/ FCRN/ LLPIN, if applicable
    4. Address of members
    5. Email IDs
    6. Date of entry of name in the register of members
  2. SBO’s Information
    1. Permanent Account Number (PAN)
    2. Self-attested copy of Passport (if foreign national)
    3. E-mail ID
    4. Address
    5. Date of acquiring the significant interest obtained in company
    6. Date of receipt of BEN-1 by the company
    7. Certified copy of BEN-1 along with attached agreement
  3. Digital signature of authorized director/ signatory

FAQ's

Who is a Significant Beneficial Owner?

According to Section 90 of Companies Act, 2013 if company is the member, then Significant Beneficial Owner is the natural person who acting alone or with other natural persons or trusts holds not less than 10% share capital or exercises influence or control in the company through other means.

 

Note: GDR, Compulsory Convertible Preference Shares, Compulsory Convertible Debentures shall be treated as shares for the purpose of this clause.

If Partnership firm is a member, then Significant Beneficial Owner is the natural person who acting alone or with other natural persons or trusts holds not less than 10% capital or has entitlement of not less than 10% of the profits of the partnership.

If no natural person could be identified in the above cases, then the Significant Beneficial Owner will be the relevant natural person who holds the position of senior managing official.

 

If the member is a Trust (through Trustee), the identification of beneficial owner(s) shall include identification of author of the trust, trustee, beneficiaries(with not less than 10% interest in trust) and any other natural person exercising ultimate effective control over the trust through chain of control or ownership.

What does it mean by declaration by SBO?

Any person, who acquires significant beneficial ownership after the commencement of these rules, shall file a Declaration in BEN-1 to the company within 30 days of acquiring such significant beneficial ownership or any change therein.

What does it mean by majority stake?

It includes the following:

  1. Holding more than 50% of equity share capital.
  2. Holding more than 50% of voting power or rights.
  3. Holding right to receive or holding more than 50% of distributable dividend or any other distribution.

What is the due date to file BEN-2?

After receiving declaration in Form BEN-1 from all the SBO, company shall file return of beneficial interest in Form BEN-2 within 30 days from receipt of declaration.

What are the duties of a reporting company?

Reporting Company is obliged to serve a notice to such member of the company against whom the company has a reasonable cause to believe the following:

  1. They are the SBOs of the company.
  2. They have the knowledge of the identity of an SBO or another person likely to have such knowledge
  3. They have been the SBO of the company any time during the three immediately preceding date on which notice is issued.
  4. The one who is not registered as SBO with the company under section 90 of Companies Act, 2013.

What will be the consequences if SBO does not file BEN-1with the company?

Every SBO is required to give detailed disclosure within 90 days from commencement of new rule in prescribed Form BEN-1. If any information disclose by SBO is false or incorrect then company can approach NCLT. In case, any person fails to give the declaration as required under Section 90(1), he shall be punishable with a fine of minimum Rs.1 lakh which can extend upto Rs. 10 Lakh and in case if the failure is a continuous one, with a further fine of Rs. 1000 per day of failure.

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