The regulatory regime of Significant Beneficial Ownership (SBO) in India has undergone key changes that a Company Secretary (CS) must adapt to. Most notably, MCA’s SBO Amendment Rules, 2024 introduced a new Form BEN-2 (for MCA’s V3 portal) with enhanced disclosure requirements, and the SBO rules now extend to LLPs under new legislation. Moreover, regulatory enforcement is picking up, with penalties being issued for non-compliance with SBO filing obligations.
This guide sets out the latest legal changes, practical implications, and a compliance playbook for Company Secretaries to ensure accurate SBO reporting under the current regime.
Legal Foundation & Recent Amendments
- Section 90 & SBO Rules, 2018
SBO obligations are anchored in Section 90 of the Companies Act, 2013, which requires companies to maintain a register of significant beneficial owners and file returns to the Registrar. The Companies (Significant Beneficial Owners) Rules, 2018 set out thresholds, forms (BEN-1 to BEN-4), and the process for declaration and filing. - Amendment Rules, 2024 — Substitution of Form BEN-2
On 15 July 2024, MCA issued the Companies (Significant Beneficial Owners) Amendment Rules, 2024 via Notification G.S.R. 404(E), which substituted the existing Form BEN-2 in the SBO Rules.Key changes in the amended BEN-2 include: - Additional disclosure options: change in particulars of existing SBO, change of existing SBO, change of existing holding reporting company.
- The new form is designed for the MCA V3 portal and supports upload of data in Excel/web-form format.
- Stricter verification norms: digital signatures, detailed attachments, and submission of more nuanced information.These changes took effect immediately from notification date (i.e. from 15 July 2024).
- Extension to LLPs — LLP (SBO) Rules, 2023
A major development: MCA published the Limited Liability Partnership (Significant Beneficial Owners) Rules, 2023 on 9 November 2023, bringing SBO disclosure into the LLP domain as well.Key features for LLPs: - Individuals holding ≥10% contribution, or ≥10% of voting rights, or ≥10% entitlement in profits, or exercising significant influence/control will be treated as SBOs.
- LLP must issue LLP BEN-4 notice to non-individual partners suspected of such holding.
- On receipt of LLP BEN-1 by an individual, LLP must file LLP BEN-2 with the Registrar within 30 days.
- Maintain LLP BEN-3 register at registered office.
- Exemptions: holdings by Central/State Government, regulated investment vehicles (mutual funds, AIFs, REITs, etc.), reporting LLP or bodies corporate controlled by government.
- The rules took effect from when notified (i.e., 9 Nov 2023).
Thus, compliance for SBO is no longer limited to companies — LLPs are in scope as well.
What CSs Must Do: Practical Compliance
Adopt the revised BEN-2 form
- Retrieve and use latest BEN-2 template from MCA’s V3 portal (with new fields).
- Be ready to file change in particulars, cessation, or change of reporting company via the same BEN-2.
- Ensure attachments (declaration documents, KYC, breakdown of indirect holdings) are correctly incorporated.
Re-examine existing SBO declarations & registers
- Review all previously filed BEN-1 / BEN-2 declarations: check if they satisfy new disclosure fields (e.g. “change in particulars” or “holding reporting company”).
- Update the SBO Register (BEN-3) to include new information fields.
- If missing, issue appropriate BEN-4 notices to members who may have changed status or where disclosures seem incomplete.
Process design & governance controls
- Allocate internal responsibility: designate a person (CS / compliance officer) to oversee SBO compliance continuously.
- Update internal templates: BEN-1 request notices, internal working worksheets to compute direct + indirect holdings, control influence assessments.
- Conduct periodic reviews of shareholding changes or restructurings to detect new SBOs.
Address LLP SBO compliance (if applicable)
- If client or companies under your care operate or have stakes in LLPs, ensure the LLPs adopt SBO compliance steps (LLP BEN-1, LLP BEN-2, LLP BEN-3, LLP BEN-4).
- For every LLP: map partner structures, analyze indirect control, issue notices to non-individual partners, file with RoC.
Risk Landscape & Recent Enforcement
- Penalties and Notices
- MCA has already issued notices under Section 206(1) to companies for non-filing of BEN-1 / BEN-2.
- The risk includes daily fines, penalties on the company, officers in default and on the SBO (if non-declaration).
- Regulatory focus is increasing: companies—particularly unlisted or privately held—cannot assume leniency.
- Substantive liability
- Cessation or change in SBO status must be promptly filed — delay may lead to faulty disclosures or regulatory misinterpretation.
- Incomplete or incorrect filings may attract queries from RoC, require corrections, or even audits / inspections.
Checklist for CSs — Implementation Roadmap
| Task | Timeline / Trigger | Notes |
|---|---|---|
| Download latest BEN-2 form and guidance | Immediately | Ensure correct form used |
| Review existing SBO declarations / filed BEN-2s | Within 1 month | Identify gaps vs new fields |
| Issue BEN-4 notices where needed | As soon as gap identified | Give statutory response time |
| Obtain fresh BEN-1 declarations (if gaps) | Within 30 days | Align with new disclosure needs |
| File updated BEN-2 returns | Within 30 days of BEN-1 | Use MCA V3, ensure attachments |
| Maintain updated SBO Register (BEN-3) | Continuous | Keep accessible for inspection |
| Map SBO obligations in LLPs | If applicable | Follow LLP rules (BEN-1 to BEN-4 etc.) |
| Conduct periodic reviews | Quarterly or on share changes | Catch new SBO status early |
| Retain working papers and correspondence | Ongoing | For audit and RoC inspection |
Conclusion
The SBO compliance regime is no longer static — recent amendments have made it more rigorous and expansive. The substitution of BEN-2, enhanced disclosure fields, integration with MCA V3 portal, and extension of rules to LLPs mark a significant shift in compliance expectations.
For Company Secretaries, this is not a mere update — it is a compliance imperative. By revisiting and upgrading existing processes, aligning with the new BEN-2 format, implementing governance controls, and staying vigilant on changes in shareholding structures, CSs can safeguard against regulatory risk while maintaining robust ownership transparency.
Staying current with MCA notifications and ensuring a proactive stance will be critical in 2025 and beyond.