What is the timeline for filing BEN-2 filing and Non Compliance

What is the timeline for filing BEN-2 filing and Non Compliance .  
Section 90 of the Companies Act, 2013, deals with the register of significant beneficial owners (SBOs) in a company. It requires companies to maintain a register of individuals or entities who have significant control over the company, whether directly or indirectly, even if they do not hold a majority of shares or voting rights.
A Significant Beneficial Owner (SBO) refers to a person or entity who holds at least 10% of the voting rights in a company, either directly or indirectly, or has significant influence or control over the company, including through other persons or agreements.
Obligation to Disclose: Companies are required to maintain a register containing the details of SBOs. This includes details like the name, address, nationality, and the nature of the control or significant influence.
Identification of SBOs: Directors of the company must take steps to identify and disclose any SBOs. If the SBO is an individual, the company is obliged to get information from the individuals, whereas for corporate SBOs, the company must trace the ultimate beneficial owner.
Filing with the Registrar: Companies must file details of SBOs with the Registrar of Companies (RoC) in a specified format.
Applicable Provisions
The MCA adjudication order involves an appeal under Section 454(5) of the Companies Act, 2013, concerning the adjudication of penalties. The relevant rules include the Companies (Adjudication of Penalties) Rules, 2014. The matter was brought before the Regional Director (WR), Mumbai, for consideration.
Facts of the Case with ROC and RD
In Pioneer Adhesives Private Limited & ORS, the Registrar of Companies, Mumbai (ROC Mumbai) vide Adjudication Order dated 23/08/2024 held the Company and its Officers/ Directors, who have defaulted liable for penalty under Section 90(11) of the Act from 01/ 04/2020 to 12/ 03/ 2024 i.e. 1441 days for not filing return of Significant Beneficial Owners of the company and changes therein with the Registrar in Form No, BEN-2 within 30 days from the date of receipt of declaration from Significant Beneficial Owner, as prescribed in Rule 4 of Companies (Significant Beneficial Owners) Rules, 2018.
The punishment for contravention of section 90 is prescribed under section 90(11) of the Companies Act, 2013 which states that:
“If a company, required to maintain register under sub-section (2) and file the information under sub-section (4) or required to take necessary steps under sub-section (4A), fails to do so or denies inspection as provided therein, the company shall be liable to a penalty of one lakh rupees and in case of continuing failure, with a further penalty of  five hundred rupees for each day, after the first during which such failure continues, subject to a maximum of five lakh rupees and every officer of the company who is in default shall be liable to a penalty of twenty-five thousand rupees and in case of continuing failure, with a further penalty of two hundred rupees for each day, after the first during which such failure continues, subject to a maximum of one lakh rupees”.
Considering the fact and circumstances of the case, Registrar of Companies (ROC) imposed penalties for non-compliance, leading the company to file an appeal before the Regional Director (RD) and an opportunity of being heard was given by the RD to appellants on 14/01/2025.The authorised representative stated that :

As per Section 2(60), "Officer in default" should be Managing Director and Company Secretary of the company who were present at said period.

Imposed Penalty
Considering all the facts, circumstances and all the submission made by the company, the adjudicating authority had imposed penalty on companies and officers in default as follows:

Name of the company/Director

Period of default

Amount of penalty

On Company

1,00,000+500*1441= 7,20,500

6,00,000

On 1ST Applicant

25,000+200*929= 1,85,800

1,25,000

On 2ND Applicant

25,000+200*496= 99,200

1,24,200

On 3rd Applicant

25,000+200*1441= 2,88,200

1,25,000

On 4th Applicant

25,000+200*1441= 2,88,200

1,25,000

On 5th Applicant

25,000+200*1441= 2,88,200

1,25,000

Confirming ROC Order
Taking into consideration the Adjudication Order of the Registrar of Companies, Mumbai; submissions made by the Appellants in their application as well as oral submissions of authorized representative during the hearing; further letter of ROC, Mumbai; this forum is of the view that the Adjudicating Officer has not followed the mandatory provisions of Section 2(60) read with 90(11) of the Companies Act, 2013 and therefore, the penalty imposed on the Appellants mentioned at Sr. No.2, 4 & 5 is 'modified' and the penalty imposed Appellants mentioned at Sr. No-I, 3 & 6 is 'confirmed' under Section 454(7) of the Companies Act, 2013 which is as under:

Name of the company/Director

Penalty imposed by adjudicating officer

Penalty ‘Modified/Confirmed by RD

Remark of RD

On Company

6,00,000

Confirmed

On 1ST Applicant

1,25,000

Waived off

Modified

On 2ND Applicant

1,24,200

Confirmed

On 3rd Applicant

1,25,000

Waived off

Modified

On 4th Applicant

1,25,000

Waived off

Modified

On 5th Applicant

1,25,000

Confirmed

Any Benefit of Section 446B of Companies Act

Section 446B of the Companies Act, 2013 provides reduced penalties for Small, Start-up companies, and OPCs—capping them at half the specified amount. This relief applies to certain non-compliances. However, in the adjudication matter of Pioneer Adhesives Private Limited & ORS, the company does not fall under the criteria of Section 446B and hence is not eligible for the reduced penalty benefit meant for Small & Start-up companies.

CCL Observations:
The case of Pioneer Adhesives Private Limited & ORS highlights the significance of compliance with Section 90 of the Companies Act, 2013, and the associated penalties for non-disclosure of Significant Beneficial Owners (SBOs). The adjudication by the Registrar of Companies (ROC) emphasized the necessity for companies to file returns in Form BEN-2 within the prescribed timeline. The appeal before the Regional Director (RD) underscores the importance of correctly identifying "officers in default" under Section 2(60), leading to modifications in the penalties imposed. The case also illustrates the strict enforcement of Section 90(11). 
Download MCA Adjudication Order

Section 90 of the Companies Act, 2013, deals with the register of significant beneficial owners (SBOs) in a company. It requires companies to maintain a register of individuals or entities who have significant control over the company, whether directly or indirectly, even if they do not hold a majority of shares or voting rights.

A Significant Beneficial Owner (SBO) refers to a person or entity who holds at least 10% of the voting rights in a company, either directly or indirectly, or has significant influence or control over the company, including through other persons or agreements.

Obligation to Disclose: Companies are required to maintain a register containing the details of SBOs. This includes details like the name, address, nationality, and the nature of the control or significant influence.

Identification of SBOs: Directors of the company must take steps to identify and disclose any SBOs. If the SBO is an individual, the company is obliged to get information from the individuals, whereas for corporate SBOs, the company must trace the ultimate beneficial owner.

Filing with the Registrar: Companies must file details of SBOs with the Registrar of Companies (RoC) in a specified format.

Applicable Provisions

The MCA adjudication order involves an appeal under Section 454(5) of the Companies Act, 2013, concerning the adjudication of penalties. The relevant rules include the Companies (Adjudication of Penalties) Rules, 2014. The matter was brought before the Regional Director (WR), Mumbai, for consideration.

Facts of the Case with ROC and RD

In Pioneer Adhesives Private Limited & ORS, the Registrar of Companies, Mumbai (ROC Mumbai) vide Adjudication Order dated 23/08/2024 held the Company and its Officers/ Directors, who have defaulted liable for penalty under Section 90(11) of the Act from 01/ 04/2020 to 12/ 03/ 2024 i.e. 1441 days for not filing return of Significant Beneficial Owners of the company and changes therein with the Registrar in Form No, BEN-2 within 30 days from the date of receipt of declaration from Significant Beneficial Owner, as prescribed in Rule 4 of Companies (Significant Beneficial Owners) Rules, 2018.

The punishment for contravention of section 90 is prescribed under section 90(11) of the Companies Act, 2013 which states that:

“If a company, required to maintain register under sub-section (2) and file the information under sub-section (4) or required to take necessary steps under sub-section (4A), fails to do so or denies inspection as provided therein, the company shall be liable to a penalty of one lakh rupees and in case of continuing failure, with a further penalty of five hundred rupees for each day, after the first during which such failure continues, subject to a maximum of five lakh rupees and every officer of the company who is in default shall be liable to a penalty of twenty-five thousand rupees and in case of continuing failure, with a further penalty of two hundred rupees for each day, after the first during which such failure continues, subject to a maximum of one lakh rupees”.

Considering the fact and circumstances of the case, Registrar of Companies (ROC) imposed penalties for non-compliance, leading the company to file an appeal before the Regional Director (RD) and an opportunity of being heard was given by the RD to appellants on 14/01/2025.The authorised representative stated that :

As per Section 2(60), "Officer in default" should be Managing Director and Company Secretary of the company who were present at said period.

Imposed Penalty

Considering all the facts, circumstances and all the submission made by the company, the adjudicating authority had imposed penalty on companies and officers in default as follows:

Name of the company/Director	Period of default	Amount of penalty
On Company	1,00,000+500*1441= 7,20,500	6,00,000
On 1ST Applicant	25,000+200*929= 1,85,800	1,25,000
On 2ND Applicant	25,000+200*496= 99,200	1,24,200
On 3rd Applicant	25,000+200*1441= 2,88,200	1,25,000
On 4th Applicant	25,000+200*1441= 2,88,200	1,25,000
On 5th Applicant	25,000+200*1441= 2,88,200	1,25,000

Confirming ROC Order

Taking into consideration the Adjudication Order of the Registrar of Companies, Mumbai; submissions made by the Appellants in their application as well as oral submissions of authorized representative during the hearing; further letter of ROC, Mumbai; this forum is of the view that the Adjudicating Officer has not followed the mandatory provisions of Section 2(60) read with 90(11) of the Companies Act, 2013 and therefore, the penalty imposed on the Appellants mentioned at Sr. No.2, 4 & 5 is 'modified' and the penalty imposed Appellants mentioned at Sr. No-I, 3 & 6 is 'confirmed' under Section 454(7) of the Companies Act, 2013 which is as under:

Name of the company/Director	Penalty imposed by adjudicating officer	Penalty ‘Modified/Confirmed by RD	Remark of RD
On Company	6,00,000	6,00,000	Confirmed
On 1ST Applicant	1,25,000	Waived off	Modified
On 2ND Applicant	1,24,200	1,24,200	Confirmed
On 3rd Applicant	1,25,000	Waived off	Modified
On 4th Applicant	1,25,000	Waived off	Modified
On 5th Applicant	1,25,000	1,25,000	Confirmed

Any Benefit of Section 446B of Companies Act

CCL Observations:

The case of Pioneer Adhesives Private Limited & ORS highlights the significance of compliance with Section 90 of the Companies Act, 2013, and the associated penalties for non-disclosure of Significant Beneficial Owners (SBOs). The adjudication by the Registrar of Companies (ROC) emphasized the necessity for companies to file returns in Form BEN-2 within the prescribed timeline. The appeal before the Regional Director (RD) underscores the importance of correctly identifying "officers in default" under Section 2(60), leading to modifications in the penalties imposed. The case also illustrates the strict enforcement of Section 90(11).