SBO Electronic Register on V3 Portal Effective April 1, 2026: BEN-2 30-Day Filing, Rs 10 Lakh Penalty Under Section 90(11), and Annual Verification Map

Quick Summary: SBO Electronic Register on V3 Portal at a Glance

• What changed: From April 1, 2026, every Indian company must maintain its Significant Beneficial Owner (SBO) Register in electronic form on the MCA V3 portal under the amended Companies (Significant Beneficial Owners) Rules, 2018. Paper-based MGT-4 / MGT-5 / MGT-6 style maintenance is no longer compliant.
• Filing window: Form BEN-2 must be filed within 30 days of receipt of declaration in BEN-1, and the SBO Register on the V3 portal must reflect the same data within 15 days of any change (decrease or increase in indirect holding, change of nominee, or exit of SBO).
• Penalty exposure: Default attracts Rs 10 lakh penalty under Section 90(11) of the Companies Act, 2013 on the company and every officer in default, plus a continuing penalty of Rs 1,000 per day (capped at Rs 5 lakh per officer) so long as the failure subsists.
• Annual verification: Every reporting company must now confirm SBO Register accuracy annually through the digital declaration module on V3 (mandatory tick-box during MGT-7 / MGT-7A annual return filing for FY 2025-26).
• Who is impacted: All Indian companies (private, public, OPC, Section 8) other than wholly-owned subsidiaries of a listed reporting entity. Around 14 lakh active companies fall within scope. Family-owned groups, multi-layer holding structures, and PE/VC-funded startups are at highest risk.

Why the SBO Electronic Register Mandate Matters Now

The Significant Beneficial Owner (SBO) framework under Section 90 of the Companies Act, 2013 read with the Companies (Significant Beneficial Owners) Rules, 2018 has been on the statute book since 2018. What changed on April 1, 2026 is the mode of recordkeeping. The Ministry of Corporate Affairs (MCA), through its public notice dated February 28, 2026 and the consequential amendment to Rule 5 of the SBO Rules, has discontinued physical maintenance of the SBO Register and transitioned the entire compliance to the V3 portal as a continuously updatable digital register.

For a busy CA or company secretary, this is not a paperwork tidy-up. It is a substantive shift because the V3 SBO Register now serves as the prima facie evidence of SBO disclosure. If the V3 record does not match the BEN-2 filed in your SRN history, the gap is visible to the ROC, to investigating agencies (ED, SFIO), and to any acquirer running due diligence. The April 1, 2026 commencement also coincides with the first year of operation under the Income-tax Act, 2025, which independently asks for beneficial ownership disclosure under Section 92D and Section 285BA of the new Act. The two regimes are now data-aligned: a discrepancy in the V3 SBO Register will be flagged in income-tax assessments under the new Act.

Recap: Who is a Significant Beneficial Owner Under Section 90?

An individual is an SBO of a reporting company (the Indian company that holds the underlying ownership chain) if she, alone or together with persons acting in concert:

• Holds not less than 10 percent of the shares indirectly, or together with any direct holdings; or
• Holds not less than 10 percent of the voting rights indirectly, or together with any direct holdings; or
• Has the right to receive or participate in not less than 10 percent of the total distributable dividend or other distributions, indirectly or together with direct holdings; or
• Has the right to exercise, or actually exercises, significant influence or control in any manner other than through direct holdings.

The 10 percent threshold is indirect-only. Pure direct shareholders (with no indirect chain) are not SBOs and are captured separately in the register of members under Section 88. If an individual holds shares both directly and indirectly, the indirect holding alone must be at least 10 percent for SBO trigger; the direct holding is then aggregated only after the threshold is crossed.

What Exactly Must Be Maintained on the V3 SBO Register from April 1, 2026?

The new electronic SBO Register on V3 must capture, for every SBO of the reporting company, the following data fields. Each field is now individually validated by the V3 portal at the time of update, and a missing or inconsistent field will block submission.

Field Group	Specific Data Required
Identity	SBO full name, father or spouse name, date of birth, nationality, PAN, Aadhaar (last 4 digits masked), passport number (if foreign national), residential address.
Holding Particulars	Date on which the individual became an SBO; percentage of indirect holding (shares, voting rights, dividend rights, or significant influence basis); whether the holding is alone or in concert.
Ownership Chain	Full chain of holding entities between the SBO and the reporting company: name, CIN or LLPIN or foreign-equivalent ID, jurisdiction, percentage holding at each layer.
Filing References	SRN of BEN-1 declaration received from the SBO; SRN of BEN-2 filed with ROC; date of last verification under the annual cycle.
Change Log	Date and nature of every change to SBO holding (acquisition, transfer, exit, change of nominee), with cross-reference to the BEN-2 filed for the change.

The Three Filing Deadlines You Cannot Miss

1. Initial BEN-2 Filing: 30 Days from BEN-1 Receipt

When a reporting company receives a BEN-1 declaration from a person admitting to be an SBO (or after the company itself identifies an SBO via BEN-4 notice), the company must file Form BEN-2 with the ROC within 30 days. The V3 SBO Register entry must be made simultaneously. From April 1, 2026, the V3 portal links the BEN-2 SRN automatically into the Register; manual entry is no longer required.

2. Update on Change: 15 Days from Change

Any change in the indirect holding of an existing SBO (including her exit, replacement, or change of nominee) must be reflected on the V3 SBO Register within 15 days. The 30-day BEN-2 filing window for the change continues, but the 15-day Register update is a separate compliance and a separate default.

3. Annual Verification: At MGT-7 or MGT-7A Filing

From FY 2025-26 onwards, the annual return form MGT-7 (or MGT-7A for OPCs and small companies) carries a mandatory tick-box confirming that the V3 SBO Register has been verified as accurate as on the financial year-end date. If the company has no SBOs, a NIL confirmation must be filed. The verification declaration must be signed digitally by the company secretary (or, in the absence of a CS, by a director) and counter-validated by a practising CS or CA in the certificate appended to MGT-7.

Penalty Map: Section 90(11) and the Continuing Default Clock

The MCA has not amended the penalty quantum, but the trigger points have multiplied. Each separate failure (BEN-2 non-filing, V3 Register non-update, annual non-verification) attracts a separate Section 90(11) action.

Default	Penalty on Company	Penalty on Officer in Default
Failure to maintain V3 SBO Register (Section 90(11))	Rs 10 lakh + Rs 1,000 per day continuing	Rs 1 lakh to Rs 10 lakh + Rs 1,000 per day continuing (capped Rs 5 lakh per officer)
Failure to file BEN-2 within 30 days (Section 90(10))	Rs 1 lakh + Rs 500 per day continuing (capped Rs 5 lakh)	Rs 25,000 to Rs 1 lakh + Rs 200 per day continuing (capped Rs 1 lakh)
False or incorrect SBO declaration (Section 90(12))	N/A (individual liability)	SBO or officer: imprisonment up to 1 year, or fine Rs 25,000 to Rs 1 lakh, or both
Failure of annual verification at MGT-7 (Section 92(5) read with Section 90(11))	Rs 50,000 + Rs 100 per day continuing (capped Rs 5 lakh)	Rs 50,000 + Rs 100 per day continuing (capped Rs 5 lakh)

The continuing-default clock starts on the day immediately after the deadline and runs until the V3 SBO Register is brought into compliance. There is no good-faith defence for late updating; the only defence is to demonstrate that no SBO exists for the reporting company, supported by a board resolution and a BEN-3 register of non-applicability.

Practical Compliance Checklist for FY 2026-27

The following 10-step checklist is what we are running for our advisory clients in May and June 2026. Treat this as the working playbook for any company with non-trivial holding structures.

1. Map the ownership chain: Document every holding entity between each ultimate individual shareholder and the reporting company. Foreign LLCs, trusts, family offices, and partnership firms must be mapped, not only Indian companies.
2. Apply the 10 percent test layer-by-layer: Compute the effective indirect percentage at the reporting company level for every individual in the chain. The math is multiplicative across layers (for example, 60 percent of 40 percent of 50 percent equals 12 percent indirect).
3. Issue BEN-4 notices: For any individual whose effective indirect holding is at or above 10 percent and who has not voluntarily declared, issue a BEN-4 notice under Rule 2A asking for declaration within 30 days. If no response, file an application under Section 90(7) with the Tribunal for restriction of rights on the holding.
4. Collect BEN-1 declarations: File a BEN-1 declaration from every confirmed SBO, with PAN, Aadhaar last 4 digits, and the full chain.
5. File BEN-2 within 30 days: File Form BEN-2 with the ROC for each SBO, attaching the BEN-1.
6. Register V3 SBO module access: The CS or authorised signatory must register on the V3 SBO Register module under MCA V3 services. DSC re-association may be required (allow 7 to 10 working days as flagged in our earlier MCA21 V2 decommissioning advisory).
7. Populate the V3 SBO Register: Enter every SBO record on V3 with the data fields per the table above. Cross-link the BEN-2 SRN.
8. Set up the change-monitoring SOP: Build an internal calendar that triggers a V3 update within 15 days of any change in shareholding at any layer of the chain. PE or VC-funded companies should align this with each round closing date.
9. Annual verification preparation: Block calendar time in October to November 2026 to verify the V3 SBO Register before filing MGT-7 or MGT-7A for FY 2025-26 (due within 60 days of AGM).
10. Documentation file: Maintain hard-copy and PDF backup of all BEN-1, BEN-2, BEN-3, BEN-4, V3 screenshots, and verification certificates. Keep this file ready for the first 5 years; SFIO and ED inspections under PMLA routinely ask for it.

High-Risk Structures That Need a Pre-Audit

Five categories of clients should run an internal SBO audit before September 30, 2026. These are the structures where the V3 SBO Register is most likely to mismatch the actual ownership reality.

• Family-owned groups with HUFs and trusts: Beneficiary children may cross 10 percent indirect through trust holdings. The trustee, the protector, and the settlor are separately tested.
• PE or VC-funded startups: Multi-class share structures, founder vehicles, ESOP trusts, and overseas LP or GP layers complicate the chain. Most cap tables we have reviewed since April 2026 had at least one missing SBO disclosure.
• Multi-layer holding companies: Three-layer or four-layer holdings (especially with intermediate Singapore, Mauritius, or UAE entities) routinely fail the multiplicative test. Indian boards often assume foreign-layer SBOs are not in scope, but Section 90 applies to the Indian reporting company regardless of where the SBO sits.
• Joint ventures and shareholder-agreement-driven control: The “significant influence or control” limb of Section 90(1) is independent of percentage. A shareholder with veto rights, board nomination, or affirmative-vote items over reserved matters may be an SBO even at 5 percent.
• Companies with foreign nominee shareholders: If any Indian shareholder holds shares as a nominee for a foreign individual, the foreign individual is the SBO and BEN-1 disclosure is mandatory.

Interaction with Other April 1, 2026 Compliance Changes

The SBO V3 mandate is one of three compliance shifts that came into force on or around April 1, 2026 and that must be planned together for any FY 2025-26 audit cycle:

1. Income-tax Act, 2025 (effective April 1, 2026 for AY 2026-27): Section 92D and Section 285BA disclosures now align with V3 SBO data. Any inconsistency between the BEN-2 record on V3 and the master file under Section 92D will be flagged in transfer-pricing assessments under the new Act. See our advisory on Section 92CE Secondary Adjustments for the related transfer-pricing compliance touch-points.
2. MCA21 V2 Portal Decommissioning (June 30, 2026): The legacy V2 portal at mca.gov.in/mcafoportal will go dark. Companies that delay V3 onboarding for SBO compliance also lose the ability to download historical e-forms and master data. See our 9-week MCA21 V2 migration checklist.
3. ROC Jurisdiction Re-alignment (effective February 16, 2026): Several ROC offices (Delhi, Mumbai, Kolkata, UP) were split. Confirm your current ROC before filing any BEN-2 or amended SBO Register entries. Filing in the wrong jurisdiction is a non-curable defect.

FAQs on the V3 SBO Register Mandate

Q1. Does a wholly-owned subsidiary of a listed company need to maintain a V3 SBO Register?

No. Rule 8 of the SBO Rules continues to exempt reporting companies that are wholly-owned subsidiaries of a listed entity (the parent files its own SBO disclosure with SEBI). All other reporting companies, including subsidiaries of unlisted public companies, are in scope.

Q2. Our company has no SBO. Do we still need to do anything on V3?

Yes. You must record a NIL declaration on the V3 SBO Register (a “no-SBO” entry with board resolution reference) and tick the NIL confirmation in MGT-7 for FY 2025-26. Failure to file the NIL confirmation will be treated as failure of annual verification under Section 92(5).

Q3. The 10 percent test is at the level of indirect holding. What if an individual holds 9 percent indirect plus 5 percent direct?

She is not an SBO. The 10 percent threshold is based on indirect holding alone. The 5 percent direct holding is captured in the register of members under Section 88 but does not aggregate with the indirect for Section 90 purposes unless the indirect alone reaches 10 percent.

Q4. We have a foreign LLC layer where the LLC manager has discretionary control. Is the manager an SBO?

Yes, under the “significant influence or control” limb of Section 90(1). Discretionary management authority over a foreign vehicle that ultimately holds 10 percent or more in the Indian reporting company is captured even if the manager has no equity interest. BEN-1 declaration must be obtained from the manager.

Q5. What is the timeline for V3 SBO module access if our DSC is currently linked to V2?

Allow 7 to 10 working days for DSC re-association to V3, plus 2 to 3 working days for the SBO module activation. We recommend completing this exercise by May 31, 2026 to leave a buffer before the June 30, 2026 V2 cutoff.

Q6. Can the V3 SBO Register be inspected by members of the company?

Yes, under Rule 5(3), members of the company are entitled to inspect the SBO Register during business hours on payment of such fee as may be specified (currently capped at Rs 50 per inspection). The V3 portal allows download of a member-facing inspection extract that masks the Aadhaar, PAN, and date-of-birth fields.

Q7. Is there any condonation scheme for late BEN-2 filings prior to April 1, 2026?

The MCA has not announced a condonation scheme specifically for SBO filings. The general additional fees regime under Section 403 (capped at 12 times normal fee for delays beyond 12 months) continues to apply. Regularising historical SBO non-disclosure should be done before the V3 Register is populated; otherwise, the V3 record itself will reflect the gap.

Q8. What happens if our SBO is a non-resident Indian and refuses to share PAN or Aadhaar?

For NRI or foreign-national SBOs, the V3 portal accepts passport number and country-of-residence in lieu of Aadhaar. PAN is required if the SBO has any Indian source income (almost always the case if she is an SBO of an Indian reporting company). If the SBO refuses to provide PAN, file BEN-4 followed by a Tribunal application under Section 90(7) for restriction of rights on the underlying holding.

Action Items for the Next 60 Days (May to June 2026)

1. Week 1 (May 1 to 7): Identify reporting status of all Indian companies under your portfolio. Categorise as “in scope” or “exempt under Rule 8”.
2. Week 2 to 3 (May 8 to 21): Complete ownership-chain mapping and the 10 percent multiplicative test for each in-scope company.
3. Week 3 to 4 (May 15 to 28): Complete DSC re-association to V3 and SBO module activation.
4. Week 4 to 6 (May 22 to June 11): Obtain BEN-1 from confirmed SBOs; file BEN-2 for any SBO not previously filed.
5. Week 6 to 8 (June 5 to 19): Populate V3 SBO Register for every reporting company. Cross-link BEN-2 SRNs.
6. Week 9 (June 20 to 26): Internal review and sign-off by CS or Director. File NIL declarations for non-SBO companies.
7. Week 10 (June 27 to 30): Buffer week for V3 portal load issues. Use this also as the final V2-to-V3 migration cutoff per the MCA21 V2 decommissioning advisory.

Disclaimer

This advisory is based on the Companies (Significant Beneficial Owners) Rules, 2018 as amended on February 28, 2026 and effective April 1, 2026, the MCA public notice dated February 28, 2026, and Rule 5 of the said Rules read with Section 90 of the Companies Act, 2013. SBO determination is highly fact-specific and depends on the precise structure of the holding chain, shareholder agreements, voting arrangements, and control mechanisms in place. The information here is provided for general guidance and does not substitute for advisory specific to your client’s structure. Please consult qualified professional advice before making any compliance or filing decisions. Penalty quantums cited are as on the date of publication; the MCA may revise them through subsequent rule amendments.

Get Expert Guidance

If your client’s holding structure spans multiple layers, has foreign or trust intermediaries, or you are seeing a mismatch between the actual cap table and the V3 SBO Register, our team can help you map the ownership chain, identify SBOs accurately, and complete the V3 Register population within the 60-day window. Schedule a quick call with Tax Update India to discuss your situation, or write to us at mail@taxupdate.in.