ZERO FINE WAS LEVIED BY ROC CHENNAI ON SRA Systems Limited FOR FAILING TO FILE FORM BEN-2 UNDER SECTION 90 OF THE COMPANIES ACT, 2013- WHY?

 ZERO FINE WAS LEVIED BY  ROC CHENNAI ON SRA Systems Limited FOR FAILING TO FILE FORM BEN-2 UNDER SECTION 90 OF THE COMPANIES ACT, 2013-  WHY?

FACTS OF THE CASE

Under Section 90 of the Companies Act, 2013 and the Companies (Significant Beneficial Owners) Rules, 2018:

·      Companies must identify and maintain records of Significant Beneficial Owners (SBOs).

 

·      When an SBO declaration (BEN-1) is received, the company must file Form BEN-2 with the Registrar of Companies (ROC) within the prescribed timeline

 

ALLEGED BREACH

 SRA Systems Limited had not filed Form BEN-2 to report its SBO, specifically a foreign body corporate named Samvidhana Inc. which held over 53% of its shares.

This appeared to be a technical violation of Section 90 of the Companies Act, 2013.

COMPANY'S STAND:

SRA Systems Limited argued that compliance was impossible because Samvidhana Inc. was dissolved on December 13, 2018, which was prior to the due date and the operational start of the SBO compliance rule.

ROC VERDICT

After reviewing the submissions, the Adjudicating Authority (ROC Chennai) accepted the company's explanation. The authority determined that a non-existent, dissolved entity could not trigger the compliance obligations under Section 90(11) of the Companies Act.

Because Samvidhana Inc. was dissolved prior to the compliance period, no SBO existed that required reporting under the SBO regime at the relevant time.

WHAT WE LEARN FROM THIS CASE?

This case highlights an important compliance nuance:

A company isn’t automatically liable for non-filing of BEN-2 if the SBO situation underlying the requirement never existed in a legally actionable form (e.g., dissolved entity).

In contrast, where actual SBOs exist and BEN-2 remains unfiled, ROC adjudications often lead to penalties (as seen in other MCA adjudications).

R V SECKAR, FCS,LLB 79047 19295