Requirement to file BEN-2 Return
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. Where any declaration regarding beneficial interest and any change from significant beneficial owner, is received by the company, it 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 declaration by it, along with the fees as prescribed in companies (Registration offices and fees) Rules, 2014.
Significant Beneficial Owner and Declaration
Every individual, who acting alone or together, or through one or more persons or trust, including a trust and persons resident outside India, holds beneficial interests, of not less than twenty-five per cent. or such other percentage as prescribed, in shares of a company or the right to exercise, or the actual exercising of significant influence or control as defined in clause (27) of section 2, over the company (herein referred to as “significant beneficial owner”), shall make a declaration to the company, specifying the nature of his interest and other particulars, shall file a declaration in Form No. BEN-1 to the reporting company, within thirty days of acquisition of the beneficial interest or rights and any change thereof
“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  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;
Significant beneficial ownership, in case of persons other than individuals or natural persons, shall be determined as under-
- where the member is a company, the significant beneficial owner is the natural person, who, whether acting alone or together with other natural persons, or through one or more other persons or trusts, holds not less than ten per cent. share capital of the company or who exercises significant influence or control in the company through other means;
- where the member is a partnership firm, the significant beneficial owner is the natural person, who, whether acting alone or together with other natural persons, or through one or more other persons or trusts, holds not less than ten per cent of capital or has entitlement of not less than ten per cent. of profits of the partnership;
- where no natural person is identified under company or partnership firm, the significant beneficial owner is the relevant natural person who holds the position of senior managing official;
- where the member is a trust (through trustee), the identification of beneficial owner(s) shall include identification of the author of the trust, the trustee, the beneficiaries with not less than ten per cent. interest in the trust and any other natural person exercising ultimate effective control over the trust through a chain of control or ownership;
Shares for purpose of Significant Beneficial Ownership
The instruments in the form of global depository receipts, compulsorily convertible preference shares or compulsorily convertible debentures shall be treated as shares’ for this purpose.
Register of Significant Beneficial Owners
The company shall maintain a register of significant beneficial owners in Form No. BEN-3. The register shall be open for inspection during business hours, at such reasonable time of not less than two hours, on every working day as the board may decide, by any member of the company on payment of such fee as may be specified by the company but not exceeding fifty rupees for each inspection.
Notice seeking information about Significant Beneficial Owners
A company shall give notice, in Form no. BEN-4, to any person (whether or not a member of the company) whom the company knows or has reasonable cause to believe—
- to be a significant beneficial owner of the company;
- to be having knowledge of the identity of a significant beneficial owner or another person likely to have such knowledge; or
- to have been a significant beneficial owner of the company at any time during the three years immediately preceding the date on which the notice is issued,
and who is not registered as a significant beneficial owner with the company as required.
Application to the Tribunal
The reporting company shall apply to the Tribunal within a period of fifteen days of the expiry of the period specified in the notice,
- where any person fails to give the information required by the notice in Form No. BEN-4, within the time specified therein; or
- where the information given is not satisfactory,
in accordance with sub-section (7) of section 90, for order directing that the shares in question be subject to restrictions, including
- restrictions on the transfer of interest attached to the shares in question;
- suspension of the right to receive dividend or any other distribution in relation to the shares in question;
- suspension of voting rights in relation to the shares in question;
- any other restriction on all or any of the rights attached with the shares in question]
The Tribunal may, after giving an opportunity of being heard to the parties concerned, make such order restricting the rights attached with the shares within a period of sixty days of receipt of application or such other period prescribed.
The company or the person aggrieved by the order of the Tribunal may make an application to the Tribunal for relaxation or lifting of the restrictions placed, within a period of one year from the date of such order: However, if no such application has been filed within a period of one year from the date of the order, such shares shall be transferred, without any restrictions, to the authority constituted under sub-section (5) of section 125, in such manner as may be prescribed;
It will not be made applicable to the extent the share of the reporting company is held by,
- the authority constituted under sub-section (5) of section 125 of the Act;
- its holding reporting company. However, the details of such holding reporting company shall be reported inForm No. BEN-2
- the Central Government, State Government or any local Authority;
- (i) a reporting company, or
(ii) a body corporate, or
(iii) 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;
- 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 (lnVITs) regulated by the Securities and Exchange Board of India,
- lnvestment Vehicles regulated by Reserve Bank of India, or Insurance Regulatory and Development Authority of India, or Pension Fund Regulatory and Development Authority.
If any person fails to make a declaration as required, he shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than one lakh rupees but which may extend to ten lakh rupees or with both and where the failure is a continuing one, with a further fine which may extend to one thousand rupees for every day after the first during which the failure continues.
If a company, required to maintain register and file the information, fails to do so or denies inspection as provided therein, the company and every officer of the company who is in default shall be punishable with fine which shall not be less than ten lakh rupees but which may extend to fifty lakh rupees and where the failure is a continuing one, with a further fine which may extend to one thousand rupees for every day after the first during which the failure continues.
If any person wilfully furnishes any false or incorrect information or suppresses any material information of which he is aware in the declaration made under this section, he shall be liable to action under section 447.