Sec 90 Significant beneficial ownership

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Palak (Querist)
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12 October 2023 Hi, Please tell me:
A Ltd is the holding company and B ltd is subsidiary company
A ltd is holding 90% shares in B ltd.
B ltd has no members who have more than 10%. But A ltd, who is the holding company of B ltd has 3 members who has shares more than 10%.

Is there a need to file ben-2 with respect to below explanation as per section 90 CA, 2013?

*Non-Applicability
The above rules shall not apply to such shares of the reporting entity as held by the following entities:
Holding company of the reporting entity. However, the details of the holding company shall be reported in Form No. BEN-2*

Explanation III - For the purpose of this clause, an individual shall be considered to hold a right or entitlement indirectly in the reporting company, if he satisfies any of the following criteria, in respect of a member of the reporting company, namely: -

(i) where the member of the reporting company is a body corporate (whether incorporated or registered in India or abroad), other than a limited liability partnership, and the individual,

(a) holds majority stake in that member; or

(b) holds majority stake in the ultimate holding company (whether incorporated or registered in India or abroad) of that member;

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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11 July 2024 Based on the information provided, here's the analysis regarding whether Form BEN-2 needs to be filed by A Ltd:

1. **Holding Company Exemption**: As per Explanation III under Section 90 of the Companies Act, 2013, the requirement to file Form BEN-2 does not apply to shares held by the holding company of the reporting entity (B Ltd, in this case). Therefore, A Ltd, being the holding company of B Ltd, is exempt from filing Form BEN-2 for its holdings in B Ltd.

2. **Ownership Structure**:
- A Ltd holds 90% shares in B Ltd.
- B Ltd has no members holding more than 10% individually.
- However, A Ltd itself has three members who individually hold shares in A Ltd exceeding 10%.

3. **Application of BEN-2 Filing**:
- Since B Ltd is the reporting entity and A Ltd is its holding company, A Ltd is exempt from reporting its shareholding in B Ltd in Form BEN-2.
- The exemption applies because A Ltd qualifies as the holding company under the Companies Act, 2013.

4. **Conclusion**:
- A Ltd does not need to file Form BEN-2 with respect to its shareholding in B Ltd.
- Even though A Ltd has members holding more than 10% in A Ltd itself, the requirement to file BEN-2 is specifically waived for the holding company concerning its subsidiaries.

Therefore, based on the exemption provided under Section 90 of the Companies Act, 2013, A Ltd does not have to file Form BEN-2 for its shareholding in B Ltd. This exemption is because A Ltd is the holding company of B Ltd.

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