BEN-1 and BEN-2 filing is compulsory only when a Significant Beneficial Owner (≥10 % indirect or combined holding) exists; ordinary direct shareholders of a private limited company aren’t covered. File these forms once such SBOs are identified and on every subsequent change in their ownership or particulars.

1. Why does this matter to every Private Limited Company

If you run a Private Limited Company, you already juggle DINs, DIR-3 KYC, MSME returns, and a dozen GST deadlines. One often-overlooked compliance—yet one that can invite eye-watering penalties—is the Significant Beneficial Ownership (SBO) disclosure. Two MCA forms, BEN-1 (a declaration by the owner) and BEN-2 (a return filed by the company), sit at the heart of these rules. But do they apply to every shareholding in a Private Limited Company, or only to certain owners? This deep-dive answers that question in plain English, busts common myths, and gives you a step-by-step action plan to keep your Private Limited Company penalty-proof in 2025 and beyond.

2. The short answer—then the fine print

• No, BEN-1 and BEN-2 are not filed for every shareholder.
• They are mandatory only when an individual (or group of individuals acting together) qualifies as an SBO—generally, someone who indirectly or together with direct holding holds ≥ 10 % of shares, voting rights, or “significant influence” in a Private Limited Company.
• If no person meets the SBO threshold, the company files nothing (but should maintain evidence).
• Once an SBO threshold is crossed, the individual must give BEN-1 within 30 days, and the Private Limited Company must file BEN-2 with the RoC within 30 days of receiving that BEN-1.

3. Legal framework in three minutes

Provision	What it says	Impact on a Private Limited Company
Section 90(4), Companies Act 2013	Every company must file a return of SBOs with the RoC in the form & manner prescribed.	Triggers BEN-2 once an SBO exists.
Rule 3, SBO Rules 2018 (amended 2023)	Defines “significant beneficial owner”: ≥ 10 % of shares, voting rights, or significant influence.	Sets the 10 % threshold.
Rule 4	Company to file BEN-2 within 30 days of receipt of BEN-1.	Creates the ticking clock for your compliance team.
Section 90(10) Companies Act 2013	If any person fails to make a declaration – penalty of 50,000 and in case of continuing failure, with a further penalty of 1000 Rs for each day, subject to a maximum of 2,00,000 rupees.	Shows how seriously MCA treats non-filing.
Rule 7	Tribunal may restrict transfer/dividend if the company defaults.	Shows how seriously MCA treats non-filing.

4. BEN-1 vs BEN-2 at a glance

Feature	BEN-1 (by SBO)	BEN-2 (by Company)
Who files	Individual SBO	Reporting Private Limited Company
When	Within 30 days of becoming/ceasing to be SBO	Within 30 days of receiving BEN-1
Filed with	The company (not RoC)	Registrar of Companies
Key contents	% holding, mode (shares/votes), indirect paths, PAN, Aadhaar	All BEN-1 details compiled, board resolution, list of SBOs
Penalty for default (SBO)	₹50,000 + ₹1,000/day (max ₹2 lakh)	₹10 lakh + ₹1,000/day (no upper cap)

Tip: A Private Limited Company must maintain an internal Register of SBOs (Form BEN-3). Even when no SBO exists, keep a nil register to defend against future notices.

5. Who exactly is an SBO?

1. Direct holder – An individual owning 10 % or more shares in her own name.
2. Indirect holder through company(ies) – Ownership cascades through layers; you “look through” each layer to the natural person.
3. Indirect holder through trust/partnership – The trustee or partner is traced back to the ultimate individual.
4. Significant influence – An individual with the right to appoint or remove most directors (even at < 10 % shares) may still be an SBO.

Example:

• ABC Pvt Ltd (a typical Private Limited Company) is owned 85 % by XYZ Ltd (a Singapore entity) and 15 % by the founder Mrs Meera.
• XYZ Ltd is 60 % held by Mr Lee. Mr Lee’s indirect holding in ABC Pvt Ltd is 0.60 × 0.85 = 51 %.
• Mr Lee is an SBO for ABC Pvt Ltd and must give BEN-1; ABC Pvt Ltd must file BEN-2.

6. Does every Private Limited Company file BEN-2?

Company scenario	BEN-2 required?	Why?
50-50 owned by two Indian friends (both named shareholders)	No if neither crosses 10 % indirectly; they are registered owners.	Registered owners are already on the RoC register.
Shareholding split 90 % Mr A (individual), 10 % Mrs B	Yes—Mr A is both registered & beneficial owner; still an SBO (> 10 %).	MCA clarification of 2024 says direct 10 %+ individuals are SBOs.
100 % Government company (Section 394)	Exempt	Government companies exempted via GSR 140(E), 2021.
Wholly-owned subsidiary of a listed company	Exempt	Listed parent already faces SEBI disclosure; SBO rules carve-out.
Layered foreign ownership with no individual ≥10 %	No BEN-2, but keep evidence	Prove negative with board note & nil BEN-3.

Key takeaway: A Private Limited Company does not file BEN-2 merely because it exists; it files only if an SBO exists—yet it must proactively search for SBOs and be able to demonstrate that search.

7. Practical headaches you’ll face

1. Tracing through offshore LLPs – Cayman or Singapore LLPs often mask individuals; directors must chase KYC docs.
2. Multiple small holdings adding up – MCA counts aggregate holdings and joint action.
3. Nominee arrangements – If shares are held in the name of a body corporate but controlled by a person, nominatee–nominee loops can hide SBOs.
4. Frequent changes – Any change in % triggers a fresh BEN-1 and, therefore, a fresh BEN-2—yes, even if the % moves from 12 % to 13 %.
5. Penalty exposure – Penalties accrue daily; recent NCLT orders have frozen dividends for defaults, hitting cash flow hard.

8. Seven-step compliance roadmap for a busy Private Limited Company

Step	What to do	Owner of task
1️⃣ Map the shareholding layers	Draw a share tree to the last natural person or senior managing official (SMO).	Company Secretary
2️⃣ Identify potential SBOs	Apply 10 % + significant-influence tests.	CFO/CS
3️⃣ Issue Sec 90(5) notices (Form BEN-4)	Ask suspected SBOs to declare. 30-day response window.	Board/CS
4️⃣ Receive BEN-1	Verify PAN, passport, proof of address.	Compliance team
5️⃣ Board acknowledgment	Pass resolution taking note of BEN-1.	Board
6️⃣ File BEN-2 within 30 days	Attach board resolution, list of SBOs. Upload via MCA-21 V3 (SRN-linked).	CS
7️⃣ Update internal registers (BEN-3) & AGM note	Keep ready for RoC or IT search.	CS/Accounts

Pro tip: Even a single-person Private Limited Company (with one shareholder director) must run this checklist; don’t assume exemptions.

9. Penalties: why you never want a show-cause under Section 90

Default	Penalty on SBO	Penalty on Private Limited Company / officers
Non-filing BEN-1	₹50,000 + ₹1,000 per day (cap ₹2 lakh)	N/A
Non-filing BEN-2	N/A	₹10 lakh + ₹1,000 per day (no cap)
Willful suppression	Imprisonment up to 1 year and/or fine up to ₹50 lakh	Same
Continued default (Tribunal order)	Freezing of dividend, voting rights; attachment of shares	Same

Recent MCA adjudication orders (e.g., Re Shree Powertech Pvt Ltd, 2024) confirm that even first-time lapses draw heavy fines. The RoC no longer accepts “we were unaware” as a defence.

10. Frequently asked questions

1. “Our Private Limited Company has only two directors who each hold 50 % shares. Do we still file BEN-1/BEN-2?”

Yes—each director is an SBO (> 10 %), so both must give BEN-1 and the company files BEN-2.

2. “If a foreign body corporate holds 15 % in my Private Limited Company, does the foreign company file BEN-1?”

No. You must look through that body corporate to the ultimate individual(s) controlling it. Those individuals file BEN-1.

3. “We missed the 30-day BEN-2 deadline. Can we use Condonation of Delay Scheme?”

Currently no scheme exists. File belated BEN-2 with additional fee + compounding/penalty risk.

4. “Is BEN-2 an annual return?”

Not exactly. File each time an SBO emerges or changes; however many companies re-confirm details annually via board notes.

5. “Do LLPs need BEN-2?”

Separate LLP SBO Rules 2023 require Form LLP-BEN-2; process is similar.

11. Real-world scenario walk-through

Case: A bootstrapped Indian SaaS Private Limited Company raises seed funding. Investors form SPV I Ltd (Mauritius) to hold 20 %. The SPV is owned 40 % each by two HNIs and 20 % by a VC fund.

1. The company identifies both HNIs (8 % indirect each) < 10 %, so not SBOs.
2. The VC fund’s partner controls the fund and indirectly holds 4 %.
3. But the shareholders’ agreement gives the VC partner a board veto right—counted as “significant influence.”
4. Result: VC partner is the SBO despite owning < 10 %.
5. VC partner files BEN-1; the Private Limited Company files BEN-2.

Lesson: The definition extends beyond percentages to rights.

12. Best practices for 2025

• Embed SBO checks into share-register updates whenever ESOPs, transfers, or funding rounds close.
• Automate alerts from MCA SRN timelines: 30-day tickers for BEN-2.
• Train directors and KMPs—most penalties now personally attach to them.
• Keep KYC trails (FATCA, CRS, W-8 forms) to trace foreign layers; auditors increasingly ask.
• Review shareholder agreements for veto rights or reserved matters that may silently trigger SBO status.

13. Conclusion—compliance is cheaper than compounding

In 2025, MCA has moved SBO disclosures from the back burner to centre stage. Your Private Limited Company cannot plead ignorance, nor rely on old circulars that exempted direct owners. The rule of thumb: if any individual wields ≥ 10 % ownership, voting, or influence, treat them as an SBO, collect BEN-1, and file BEN-2. Even when no one meets the threshold, document your diligence; tomorrow’s inspection could hinge on today’s paper trail.

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