BEN - 2 (Holding Reporting Company)

[Dimple Chawla]

Dear All,

Can anyone please tell if the Companies are Holding and wholly Owned Subsidiary Companies and the Holding Company is a Reporting Company.  

According to Form BEN - 2 in this case the purpose selected should be - for declaration of holding reporting company

What declaration is required in this case to be enclosed in this form - which is mandatory?

Regards,

Dimple Chawla

[PREETI AGRAWAL]

Dear Dimple,

Holding company need not file BEN-2. It is applicable only if there is an SBO in holding co.(BEN -1 & 2 both will apply)

Subsidiary co will file BEN-2, you will attach SBO declaration obtained from holding co, in case applicable.

If there is no SBO in  holding co, you need to attach note stating that there is no SBO 

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Regards,

Preeti Agrawal

Company Secretary

Cell No-9850084716

[Dimple Chawla]

Thank You for your reply.

Regards,

Dimple Chawla

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[Shalini Agarwal]

Please Confirm if there is no SBO in holding Company wether BEN 2 is required to be filed by Subsidiary Co.

For Example:

A Ltd (Reporting subsidiary Co.)

Here B Ltd holds 99.5 percent in A Limited, Further In B Limited there are body corporates and individuals holding less than 10 percent shares.

wether BEN 2 is reuired to be filed in A Ltd.?

On Tue, Jul 16, 2019 at 11:37 AM PREETI AGRAWAL <cspreet...@gmail.com> wrote:

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Regards,

Shalini Agarwal

Company Secretary

[PREETI AGRAWAL]

YES

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[V Kartik]

According to me no need to file in this particular scenario since there is no majority stake (51% holding) for anyone in B Ltd. which determines the indirect holding. So as per my view because of the virtue of absence of indirect holding, there's no SBO in this case & no need to file BEN-2.

Kartik

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[Shalini Agarwal]

Ok Thanx V Karthik.

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[Sitaram]

In my opinion it is not required since the criteria to trace the chain of indirect holding is 10% and no individual holds majority stake. Of course if there is influence or control the situation would be different.

On Tue, Jul 16, 2019 at 1:41 PM Shalini Agarwal <shali...@gmail.com> wrote:

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[Shalini Agarwal]

Ok thanx. 

Further Please may I know how to define "significant influence or control" as in my case the individuals holding 40 percent shares in reporting Co. are Directors and also the same individuals are Directors in body corporate member but does not hold any shares in body corporate member.

Do they qualify as SBO? 

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[Sitaram]

Definition of significant influence and control :

Significant influence:  Significant influence has been defined in rule 2 clause (i) to mean:

 

‘The power to participate, directly or indirectly, in the financial and operating policy decisions of the reporting company but is not control or joint control of those policies'

"Control" shall include the right to appoint majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in any other manner

More than the definition of these terms you would probably need to assess the impact of the persons powers on the reporting company. For example in case of one of our client we have arrived at an ultimate holding company after assessing a series of layers of body corporates. One of the shareholders in the ultimate holding company holds only 1 share in the ultimate holdign company but is a Director and group CEO exercising virtual control over the affairs of reporting company. By virtue of shareholding he may not be an SBO but by virtue of having a hold over the group affairs we have treated him as SBO. Again BEN 2 form seeks a copy of agreement under which the control is exercised. For this purpose we propose to have a clarification letter stating that there is no formal agreement to the effect but by nature of control exercised the person is SBO.

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[CS Rakesh Kumar]

Is there any issues in affixing DSC on BEN-2

I am not able to affix professional DSC

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Thanks & Best Regards

CS Rakesh Kumar

B.Com, MBA, ACS

Rakesh & Co.

(Company Secretaries)

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[Shalini Agarwal]

Thankyou for the detailed explanation.

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[PREETI AGRAWAL]

In example given below by Shalini , subsidiary co is required to file BEN-2 as per below mentioned Rule

8. Non-Applicability.–These rules shall not be made applicable to the extent the share of the reporting company is held by,-

(a) the authority constituted under sub-section (5) of section 125 of the Act;

(b) its holding reporting company:

Provided that the details of such holding reporting company shall be reported in Form No. BEN-2.

As stated in example holding co does not  have SBO, so we need to attach note in BEN-2 stating that there are no SBO in holding co.

Views solicited

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[meenakshi bhargava]

Dear All,

If the holding company does not have sbo then only wholly owned subsidiary is required to file BEN-2 by selecting radio button one and will attach the note by holding co that holding co has no subsidiary...

is it correct or do i have to do anything else

[Vijay Thakkar, Company Secretary]

@ meenakshi

No...

You have to report the majority shareholders of Holding Company

[meenakshi bhargava]

how when the holding company has no sbo... so why would i file the ben form..

[Vijay Thakkar, Company Secretary]

@ meenakshi

It's asking CIN of holding REPORTING Company....

If your holding company is reporting SBO then only Subsidiary Co. have to mention CIN of that holding Company...

In your case the holding Company is not reporting and does not have any SBO then as per my knowledge you don't have to file BEN-2.

[meenakshi bhargava]

as per my knowledge holding company will become reporting only when they have sbo 

in my case holding co has no sbo so i dont have to file form on behalf of holding ......

but i am confuse y would i dont file form on bahalf of wholly owned subsidiary 

[Vijay Thakkar, Company Secretary]

Yes mam,

No BEn-2 for Subsidiary if no individual holding majority shares in Holding Co.

[meenakshi bhargava]

ok thank u so much