BEN-1 and BEN-2: Beneficial Ownership Compliance

A Significant Beneficial Owner (SBO) is an individual who ultimately owns or controls not less than 10 percent of the company's shares or voting rights or the right to receive not less than 10 percent of the total distributable income. Every company must take steps to identify SBOs and require them to file Form BEN-1 with the company. The company then files Form BEN-2 with the ROC within 30 days of receiving BEN-1. Non-compliance attracts a penalty of Rs 50,000 on the company and Rs 50,000 on every defaulting officer, plus a daily fine of Rs 1,000 for continuing default.