Rules 2A explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Once the definition in rule 2 tells a company what a significant beneficial owner is, rules 2A to 6 tell it what to do about it: find the individual, get a BEN-1 declaration, file a BEN-2 return with the Registrar, keep a BEN-3 register and send BEN-4 notices to members. This article states them as amended up to G.S.R. 404(E) dated 15 July 2024 per the MCA e-book; later amendments should be checked. Rules 2A, 3 and 4 in their present form were inserted or substituted by the Amendment Rules of 8 February 2019; the earlier wording is not the rule. The BEN-2 form was substituted in 2019 and again in 2024, which affects the form only.
A reporting company must take steps to find any individual who is a significant beneficial owner and cause him to file BEN-1. Where a member that is not an individual holds not less than ten per cent of shares, voting rights or dividend rights, the company gives it a BEN-4 notice. An individual who becomes an SBO or whose holding changes files BEN-1 with the company within thirty days. The company files BEN-2 with the Registrar within thirty days of receiving the declaration and keeps a BEN-3 register. See section 90 for the Act.
Rule 2A: the duty of the reporting company
Sub-rule (1). Every reporting company shall take necessary steps to find out whether there is any individual who is a significant beneficial owner, as defined in rule 2(1)(h), in relation to it, and if so, identify him and cause him to make a declaration in Form BEN-1. The duty does not wait for someone to come forward; the company must look.
Sub-rule (2). Without prejudice to those steps, in all cases where a member other than an individual holds not less than ten per cent of its (a) shares, (b) voting rights, or (c) right to receive or participate in the dividend or any other distribution payable in a financial year, the company gives that member a notice in Form BEN-4, seeking information under section 90(5).
For how a company finds its SBOs in practice, see our post on the SBO rules as amended. If the register of members does not show the chain of ownership, our BEN-2 and significant beneficial owner service can help.
Rule 3: the BEN-1 declaration
| Sub-rule | Requirement |
|---|---|
| (1) | On the date of commencement of the Companies (Significant Beneficial Owners) Amendment Rules, 2019, every individual who is an SBO in a reporting company files a declaration in Form BEN-1 to the reporting company within ninety days from that commencement. |
| (2) | Every individual who subsequently becomes an SBO, or whose significant beneficial ownership undergoes any change, files BEN-1 to the reporting company within thirty days of acquiring it or of the change. |
| Explanation | Where an individual becomes an SBO, or his ownership changes, within the first ninety days after that commencement, it is deemed to have happened on the date those ninety days expire, and the thirty days run from then. |
The Amendment Rules are those the e-book dates 8 February 2019. Sub-rule (1) and the Explanation are transitional and relate to that start-up period; sub-rule (2) is the continuing rule. The declaration goes to the reporting company, not to the Registrar. The company's own filing is rule 4.
Rule 4: the BEN-2 return
On receipt of a declaration under rule 3, the reporting company files a return in Form BEN-2 with the Registrar, in respect of that declaration, within thirty days of the date the company receives the declaration, along with the fee as prescribed in the Companies (Registration Offices and Fees) Rules, 2014. The thirty days run from receipt by the company, not from the date on the declaration. For fees, see our article on filing fees; this article quotes none. For the form, see our guides on how to file BEN-2 and on BEN-1 and BEN-2 filing.
Rule 5: the register of significant beneficial owners
Sub-rule (1). The company maintains a register of significant beneficial owners in Form BEN-3.
Sub-rule (2). The register is 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 the company specifies, not exceeding fifty rupees for each inspection.
For the related beneficial interest forms under the Management and Administration Rules, see our article on beneficial interest.
Rule 6: notice seeking information
A company gives notice seeking information under section 90(5) in Form BEN-4. Rule 2A(2) says when the company must send it to a member that is not an individual; rule 6 says which form the notice takes. If the member does not respond, the next step is rule 7, in our article on the Tribunal application and exempt entities.
| Form | Used for |
|---|---|
| BEN-1 | Declaration by an individual to the reporting company (rule 3) |
| BEN-2 | Return by the reporting company to the Registrar (rule 4) |
| BEN-3 | Register of significant beneficial owners (rule 5) |
| BEN-4 | Notice seeking information (rules 2A(2) and 6) |
Example
Orchard Textiles Limited, a reporting company, has a corporate member, Valley Investments Private Limited, holding not less than ten per cent of its shares. Under rule 2A(2) it sends Valley a BEN-4 notice. Valley's reply shows that Ravi Iyer is the individual who holds a majority stake in Valley. Ravi files a BEN-1 with Orchard; Orchard files a BEN-2 with the Registrar within thirty days of receiving it and enters Ravi in its BEN-3 register. If Ravi later increases his holding, he files a fresh BEN-1 within thirty days of the change, and Orchard files a fresh BEN-2.
Need help with BEN-1 and BEN-2?
The company's duty to look for SBOs, collect declarations and file returns on time is where most companies slip. We help with notices, declarations, the register and the return; see our BEN-2 and significant beneficial owner service.
Key takeaways
- The reporting company must identify SBOs and cause them to file BEN-1.
- A member that is not an individual and holds not less than ten per cent gets a BEN-4 notice.
- BEN-1 within thirty days of becoming an SBO or of any change; BEN-2 within thirty days of the company receiving the declaration.
- The BEN-3 register is open to any member for not less than two hours on each working day the Board decides, at a fee not above fifty rupees.
- Forms BEN-1 to BEN-4 are annexed to the rules.
Read next
- Rules 1 and 2: who is a significant beneficial owner
- Rules 7 and 8: application to the Tribunal and exempt entities
- How to file BEN-2: significant beneficial owner process
- Section 90: significant beneficial owners
Disclaimer: Based on the Companies Act, 2013 rules named above as consolidated in the MCA e-book (consulted on 3 October 2026), with the later notifications the article names. Later amendments, fees, forms and the Companies Act, 2013 provisions referred to should be checked. This article is general information, not legal advice; check the official text before acting.