BEN 2 form- SBO(Significant Beneficial Owner)

It has enforced on 8th February of this year.

Detailed Information about form BEN 2

Form BEN 2 is required to be filed pursuant to Section 90(4) of the Companies Act, 2013 and Rule 4 of the Companies (Significant Beneficial Owners) Rules 2019, which are reproduced for your reference.

Section 90(4):

Every company shall file a return of significant beneficial owners of the company and changes therein with the Registrar containing names, addresses and other details as may be prescribed within such time, in such form and manner as may be prescribed.

Rule 4:
Upon receipt of declaration under rule 3, the reporting company shall file a return in Form No. BEN-2 with the Registrar in respect of such declaration, within a period of thirty days from the date of receipt of such declaration by it, along with the fees as prescribed in companies (Registration offices and fees) Rules, 2014.”.Rule

Form BEN 2 (Return to the registrar in respect of declaration under section 90) notified vide the companies (Significant Beneficial Owner) second amendment rules,2019 dated 1st July 2019 is available for filing purposes now.

Law(s) Governing the E-form SBO BEN 2

Section 90(1)

Every individual who is acting alone, or together or through one or more person, or trust including person resident outside India holds a beneficial interest, not less than 25%, or such other percentage as it may be prescribed in the shares of the company or right to exercise. The actual exercising significant influences or control has defined in the clause of section 2 over the company and specifying the nature of interest and other particulars. In such a manner, the period of acquisition of the beneficial interest or right and changes may be prescribed.

As per Section 2(h) of Companies (Significant Beneficial Owners) Rules, 2019

significant beneficial owner in relation to a reporting company means an individual referred to in sub-section (1) of section 90. 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:

(i) Holds indirectly, or together with any direct holdings, not less than ten percent of the shares of the company, or
(ii) Holds indirectly, or together with any direct holdings, not less than ten percent of the voting rights in the shares of the company, or
(iii) Has right to receive or participate in not less than ten percent of the total distributable dividend, or any other distribution, in a financial year through indirect holdings alone, or together with any direct holdings, or
(iv) Has the right to exercise, or actually exercises, significant influence or control, in any manner other than through direct-holdings alone.

As per rule 3 of Companies (Significant Beneficial Owners) Rules, 2019 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. viz. on or before May 8, 2019

As per rule 4 of Companies (Significant Beneficial Owners) Rules, 2019 Upon receipt of declaration under rule 3, the reporting company shall file a return in SBO BEN 2 with the Registrar in respect of such declaration, within a period of 30 days from the date of receipt of such declaration by it, along with the fees

Penalties 

For SBO Declaration (SBO BEN 2)

If any person fails to make the declaration. Then he/she has to punish with a fine and will not be less than Rs. 1 lakh and it will extend up to Rs. 10 lakh. And, the failure continuing with a further fine, it will extend to Rs.1000 for every day.

For Register of SBO (BEN 2)

If a company has required to maintain the register and file the information and fails to do so. Then he/she denies inspection as provided, the company and every officer of the company who is in default will be punished with a fine. And will not be less than Rs.10 lakh and it will extend up to Rs. 50 lakh. And the failure continuing with a further fine will extend to Rs.1000 for every day, which the failure continues.

False or Incorrect information

Hence, If any person is willing to furnish any false or incorrect information or suppress any material information. In which he/she has awareness in the declaration, made under this section, this has liable action under section 447. Which deals with the punishment of fraud in terms it shall be not less than 6 months. But it also may extend to 10 years and be liable to fine, which shall not be less than the amount involved in fraud. And it has extended to three times the amount involved in the fraud.

                                 A flow chart of SBO (BEN 2)

An individual who acting alone together, or through one or more persons or trust

• Holds indirectly, or together with any direct holdings, not less than ten percent of the shares of the company.
• Holds indirectly, or together with any direct holdings, not less than ten percent. of the voting rights in the shares of the company,
• Has right to receive or participate in not less than ten percent of the total distributable dividend, or any other distribution, in a financial year through indirect holdings alone, or together with any direct holdings
• Has the right to exercise, or actually exercises, significant influence or control, in any manner other than through direct-holdings alone.

                            a. Directors Holding ( Any % which together with                                                                         indirect holding is not less than 10%)

Holding shares in the company  Holding beneficial interest in the shares of in his own name, or the company and having made a declaration to this effect u/s 89(2).

                           b. Indirect Holdings ( Any % which individually or together                                                      with direct holding is not less than 10%)  

• A body corporate (excluding LLP but including foreign entities) being the member of the reporting company. Individuals who hold a majority stake in that body corporate or in its ultimate holding company.
• HUF being the member of the reporting company, the Karta of the HUF.
• Partnership firm or the LLP being the member of the reporting company,

1. A partner of the firm or LLP, or
2. Who holds the majority stake in the body corporate or the ultimate holding company of the body corporate. Which is the partner of the firm or LLP.

• Trust being a member of the reporting company

1. A trustee of a discretionary/charitable trust, or
2. A beneficiary of a specific trust, or
3. The author or the settler of a revocable trust.

• Pooled investment vehicle or an entity controlled by the pooled investment vehicle, being a member of the company, based in a member state of the FATF & the regulator of the securities market is a member of the IOSCO.

1. A general partner, or
2. An investment manager, or
3. A CEO where the investment manager of such pooled vehicle is a body corporate or a partnership entity.
4. The pooled vehicle is not falling in above jurisdiction provision as in 1 to 4 hereinbefore shall apply.

Body corporate and partnership firm or LLP states that 

Majority stake means holding more than 50% of the equity share capital or voting of the body corporate or having right to receive/participate in more than 50% of the distributable dividend or any other distribution by the body corporate.

In case of any help or assistance in filing your SBO (BEN 2) in Chennai, SBO (BEN 2) in Mumbai, SBO (BEN 2) in Bangalore contact Virtual auditor support team on 9962 230 333/9513 93 9333/044- 48560333 /mail us support@virtualauditor.in, our team will guide through the entire process and help you comply