By way of its order dated July 9, 2024, the Registrar of Companies (“RoC”) has imposed a penalty on HeroX Pvt. Ltd. (“Company”) and its directors Mr. Suman Kant Munjal and Mr. Akshay Munjal for a total amount of approximately INR 9,00,000 on account of non-filing of Form BEN-2 with the RoC under Section 90 of the Companies Act, 2013 (“Act”) to disclose the details of the significant beneficial owners (“SBO”).
Under section 90 of the Act read with the Companies (Significant Beneficial Owners) Rules, 2018 (SBO Rules), every company is required to file Form BEN-2 with the RoC to disclose details about their SBO. The section lays down a twin tests for a company to identify an individual who would qualify as SBO of the reporting company: (a) objective test of holding 10% or more shareholding, voting rights or dividend rights of the reporting company level (directly or indirectly); and (b) subjective test of SBO having the right to exercise or actually exercising “significant influence” or “control” in any manner other than through direct holding alone.
As per section 90(4A) of the Act, the duty is on the company to take necessary steps to identify an individual who is an SBO and issue a notice under Form BEN-4 to such individuals. Upon receipt of the details of the SBO under Form BEN-1 from the beneficiaries/owners, the company is required to file Form BEN-2 with the RoC within 30 days of the receipt of such declaration.
In the present case, the RoC observed that the Company did not take any measure to file Form BEN-2 in terms of Section 90(4) of the Act despite receiving notices in Form BEN-1 from the significant beneficial owners. In fact, the Company submitted the required e-forms only after the initiation of proceedings, indicating a violation of Section 90(11) of the Act.
Additionally, even though Mr. Suman was not a whole-time director of the Company and not an officer in default under section 2(60) of the Act, he was also held liable under violation of Section 90(11) of the Act. RoC presumed that he had knowledge of the obligation on the Company to file the relevant form with the RoC as he also himself made a SBO declaration to the Company and hence, is also liable.
Further, since the relevant shareholders had submitted Form BEN-1 to the Company at the time of creation of the interest despite the failure of the Company to issue Form BEN-4, no penalty was imposed on them by the RoC.
Key Takeaways:
This case reflects the significance of adhering to the SBO norms and the Act. As this provision is crucial for ensuring that the true ownership of companies is transparent, the RoC has been actively targeting companies that fail to comply with the SBO related rules.
As the RoC intensifies its enforcement efforts, companies should vigilant in understanding and ensuring compliance with all legal obligations set out under the Act to avoid facing similar penalties.
