A S BANKA ADVISORS

The Companies (Significant Beneficial Owners) Rules, 2018 amendment that takes effect April 1, 2026 looks, at first glance, like a routine portal upgrade. It is not. It rewires how every Indian company maintains, files, and verifies SBO data, links the new V3 register to BEN-2 SRNs, ties the same dataset into Income-tax Act 2025 transfer-pricing assessments, and lifts the headline penalty under Section 90(11) of the Companies Act 2013 to Rs 10 lakh plus Rs 1,000 every day the failure persists.

For a founder or finance lead, this is not a paperwork upgrade. It is a structural compliance shift that should drive a 10-week internal sprint starting now.

If you would rather scroll the visual version, we have packaged the full mechanics into a 9-slide carousel. Download the SBO Electronic Register Carousel PDF here.

What is changing on April 1, 2026

The paper SGT-4, SGT-5, and SGT-6 registers are gone. Every covered Indian company will maintain its SBO record on the MCA21 V3 portal. Each BEN-2 SRN flows directly into the V3 SBO Register, eliminating the long-standing reconciliation gap between filed forms and physical registers. Roughly 14 lakh active companies fall in scope. Only wholly-owned subsidiaries of listed entities are exempt under Rule 8. Unlisted public-company subsidiaries remain in scope.

The 10 percent indirect threshold, simplified

An individual is an SBO when, alone or in concert, they hold indirectly 10 percent or more of any of: shares, voting rights, distributable dividend rights, or significant influence/control. Direct shareholders are outside the SBO net unless their indirect leg already crosses 10 percent.

Practically: a 9 percent indirect plus 5 percent direct shareholder is not an SBO. The 10 percent test applies to the indirect leg only.

Three deadlines you cannot blur

• 30 days from receipt of BEN-1 to file BEN-2. The SRN auto-feeds the V3 register from April 1.
• 15 days from any chain change to update V3. A change in holding percentage, a new ESOP exercise, a layer added in the chain – all trigger this clock.
• Annual verification at MGT-7 / 7A. A new tick-box requires CS or director sign-off, counter-validated by a practicing CS or CA.

The penalty math

For register non-maintenance under Section 90(11), the company carries Rs 10 lakh plus Rs 1,000 per day, uncapped. Officers in default carry Rs 1 lakh to Rs 10 lakh plus Rs 1,000 per day, capped at Rs 5 lakh each. False declarations under Section 90(12) attract imprisonment up to 1 year, or a fine of Rs 25,000 to Rs 1 lakh, or both.

For a startup that has not run a structured SBO walk in 18 months, the realistic exposure is closer to Rs 12 to 15 lakh by the time the FY 2025-26 MGT-7 lands.

What this means for your startup

Five structures account for the vast majority of undisclosed SBOs we see in advisory work:

1. Family HUFs and trusts with multiple beneficiaries that quietly cross 10 percent indirectly
2. PE/VC-backed startups with multi-class shares, founder vehicles, and ESOP trusts on top of foreign LP layers
3. Three-to-four tier holdings with Singapore, Mauritius, or UAE intermediaries
4. JV and control arrangements where veto rights, board nominations, or reserved-matter voting at sub-10 percent equity still pull the holder into SBO scope
5. Foreign nominee structures where Indian shareholders mask actual foreign individuals

If any of these describe your cap table, the indirect-percentage walk is not optional this month.

The cross-regime trap most founders miss

The Income-tax Act 2025 brought Sections 92D and 285BA into a tighter relationship with V3 beneficial ownership data. From April 1 forward, transfer-pricing assessments for any related-party international transaction cross-check the BEN-2 V3 record against the master file beneficial ownership disclosure. Any discrepancy is now a transfer-pricing red flag, not just a Companies Act compliance gap. The old habit of filing BEN-2 conservatively for the MCA and a different beneficial ownership map for the income-tax master file no longer works.

A 10-week implementation plan you can run yourself

Weeks 1 to 3: Confirm reporting status. Pull the cap table for every group entity. Run the multiplicative 10 percent test layer by layer.

Weeks 3 to 6: Re-associate every authorised signatory’s DSC to V3 (allow 7 to 10 working days). Activate the SBO module. Collect fresh BEN-1 declarations from identified SBOs. File any pending BEN-2 forms.

Weeks 6 to 9: Populate the V3 SBO Register with all required identity, holding, and chain data. Cross-reference every BEN-2 SRN. Internal review by CS or director. File NIL declarations for non-SBO companies via BEN-3.

Week 10: Buffer for portal capacity. Complete the V2 to V3 migration before the June 30, 2026 cutoff that runs in parallel.

Need help mapping your structure?

If your group has more than two layers, foreign intermediaries, or beneficiary trusts, the indirect-percentage walk is the single highest-leverage compliance task this quarter. Schedule a strategy session with A S Banka Advisors Private Limited.

Disclaimer: This advisory reflects the SBO Rules as amended February 28, 2026, and Section 90 of the Companies Act, 2013. SBO determination is fact-specific and structure-dependent. Professional advice tailored to your group’s circumstances is essential before compliance decisions.