Beneficial ownership: the 10 percent test, the new October 2026 regulations and what to file

Last verified against the primary sources on 15 October 2026; the late filing charge was rechecked on 22 October 2026.

Updated 22 October 2026: from 22 October a late beneficial ownership form costs a flat Rs 1,000 a week under Regulations No. 1(II) of 2026 (Gazette 2511/47), not the doubling charge first set in October. Steps 4 and 6 and the FAQ are updated.

Updated 3 November 2026: beneficial ownership forms are filed on the Beneficial Ownership System (bo.drc.gov.lk), signed in with the eROC login, and the weekly charge applies where a form misses the period prescribed for it.

Beneficial ownership filing has three parts: find the people, file the right form, and keep it current. A shareholder register that lists a holding company is no longer enough. Every company must look through to the natural persons who ultimately own or control 10 percent or more, or who exercise effective control, and notify the Registrar of Companies [1]. The threshold is not 25 percent. The rules on forms changed again on 9 October 2026: the Companies (Beneficial Ownership) Regulations, No. 1(I) of 2026, published in Gazette Extraordinary No. 2509/67 of 9 October 2026, came into force that day and rescinded the March 2026 regulations with effect from 8 October 2026 [2]. The Registrar's deadline for existing companies to submit their beneficial ownership information was 21 October 2026 [3]; a company that has not filed is now late, and Step 6 sets out what it faces.

Take a hypothetical private company. A, an individual, holds 12 percent directly. HoldCo holds 30 percent, and HoldCo is owned 40 percent by B, 40 percent by C and 20 percent by E, all individuals. A is a beneficial owner. B and C each hold 12 percent indirectly (40 percent of 30 percent), so both must be disclosed. E holds 6 percent and is not, unless E has control by other means. D holds 5 percent but has a contractual right to appoint and remove a majority of the board, so D is a beneficial owner through effective control.

This guide covers the definition, the look-through, the forms under the new regulations, the authorised person, deadlines and charges. It does not cover public access requests or the State-owned company rule in detail.

Checklist: documents needed

• Share register and a group structure chart with percentages at every level
• Shareholder agreements, nominee arrangements and side letters that confer control
• For each beneficial owner: full names, dates and places of birth, nationality, residence, addresses, NIC, TIN or passport number, contact details
• A statement of the nature and extent of each person's ownership or control
• Board resolution appointing the authorised person (a natural person residing in Sri Lanka)
• The new BO forms from the Registrar (BO 1 to BO 8)
• Proof of each filing and the date

Step 1. Identify every natural person at or above 10 percent, or with effective control

What to do. Section 130J defines a beneficial owner as "a natural person who ultimately owns or controls ten per cent or more of a company", directly or indirectly, through shares, voting rights or other ownership interest, and "also includes a natural person who exercises effective control through other means" [1]. Effective control includes control through a chain of ownership, by appointing or removing a director, or by any other means such as the ability to take strategic decisions [1]. Look through corporate shareholders, nominees and trusts until you reach natural persons.

Where. The share register, group chart and any control agreements.

What you need. Full personal details for each person: names, dates and places of birth, nationalities, countries of residence, addresses, NIC, TIN or passport numbers, contact details, and a statement of the nature and extent of their ownership [4].

What goes wrong. Stopping at the corporate shareholder's name. Ignoring a person who controls through a nominee or a board appointment right.

How long. A day for a simple company; several days for a layered group.

Instrument: Companies Act, No. 07 of 2007, ss.130A(1) and 130J, inserted by the Companies (Amendment) Act, No. 12 of 2025. Official link: Companies (Amendment) Act No. 12 of 2025. Last verified: 15 Oct 2026.

For trust structures, distinguish the company disclosure rules from the status and scope of the Trusts Amendment Bill.

Step 2. Work out indirect holdings by multiplying down the chain

What to do. Where shares are held through companies, multiply the percentages at each level. A person who owns 40 percent of a company that owns 30 percent of the target holds 12 percent indirectly. Add a person's direct and indirect holdings together before applying the 10 percent test.

Where. The group chart.

What you need. Accurate percentages at each level.

What goes wrong. Adding percentages along a chain instead of multiplying them. Forgetting to add a person's direct 4 percent to an indirect 7 percent: together they make 11 percent, which is over the line. Treating a percentage below 10 as the end of the question; a person below 10 percent with a right to appoint directors is still in.

How long. Part of Step 1.

Instrument: Companies Act, s.130J ("direct or indirect ownership or control"). Official link: Act No. 12 of 2025. Last verified: 15 Oct 2026.

Step 3. Use the forms in the new regulations

What to do. The 2026 regulations set out which form does what [2]:

• BO 1 at incorporation (reg 2(1)).
• BO 2 or BO 3 within twenty working days of an issue or transfer of shares (reg 2(2)); the Act sets the same twenty days [4].
• BO 4 with the annual return (reg 3).
• BO 5 for the authorised person and later changes (reg 4).
• BO 6 for a change in the location of the register (reg 5).
• BO 7 for an existing company to report the beneficial owners it has on the date the regulations came into force (reg 6(1)); a depository of a licensed stock exchange files BO 7 for listed companies (reg 6(2)).
• BO 8 for any change in a beneficial owner's details, such as name, address, nationality, NIC, TIN or passport number, within fourteen working days of the change (reg 7).

Shareholders must give the company their details within ten working days of a subscription or transfer [4].

Where. The Registrar of Companies, through the Beneficial Ownership System (bo.drc.gov.lk), signed in with the eROC login.

What you need. The details from Step 1 and the form for the event.

What goes wrong. Filing under the March 2026 forms after 8 October. Regulation 11 rescinded those regulations "without prejudice to the activities completed during its validity period" [2], so a filing already made stands, but new filings follow the new forms.

How long. Same day once the details are gathered.

Instrument: Companies (Beneficial Ownership) Regulations, No. 1(I) of 2026, Gazette Extraordinary No. 2509/67 of 9 October 2026, regs 1 to 7 and 11; Companies Act s.130A(1), (2) and (7). Official link: Regulations, as posted by the Registrar. Last verified: 15 Oct 2026.

Step 4. Existing companies: file BO 7 (deadline 21 October 2026)

What to do. If your company existed when the regulations came into force on 9 October 2026, forward and verify your beneficial owners' details on Form BO 7 [2]. The Registrar's notice of 30 September 2026 states: "The revised deadline for submission is 21st October 2026" [3]. The regulations themselves give no date for BO 7. The Act gave existing companies six months from its operation on 30 March 2026, which ran to 30 September 2026 (s.130H(1)) [4] [6]; the Registrar's notice extended the submission date to 21 October 2026. That date has passed, so a company that has not filed BO 7 should file it now.

Where. The Beneficial Ownership System (bo.drc.gov.lk), signed in with the eROC login.

What you need. The Step 1 details for every beneficial owner.

What goes wrong. Assuming an earlier filing under the March regulations has dealt with it. Check with the Registrar whether your earlier submission counts, and file BO 7 if in doubt.

How long. The deadline was 21 October 2026. A company filing after it is late: under reg 10, as replaced from 22 October 2026, the Registrar charges the weekly penalty in Step 6 [7]. A company that fails to comply with s.130H is also liable on conviction to a fine of up to Rs 50,000, imprisonment of up to six months, or both (s.130H(4)) [4].

Instrument: Regulations No. 1(I) of 2026, reg 6; Companies Act s.130H(1); Registrar of Companies notice of 30 September 2026. Official link: drc.gov.lk notice. Last verified: 15 Oct 2026.

When the ownership change is an acquisition, complete a corporate and financial check before buying the company as well as updating the beneficial-owner records.

Step 5. Appoint the authorised person

What to do. Appoint "a natural person residing in Sri Lanka" as the authorised person, responsible for keeping the register of beneficial owners and making the details available to the authorities listed in s.130B [1]. Disclose the person at incorporation and on any change, on Form BO 5 [1] [2]. Companies that existed when the Act came into operation had three months to disclose their authorised person [1]. To replace the authorised person, see the BO 5 change of authorised person.

Where. A board resolution, then Form BO 5 on the Beneficial Ownership System (bo.drc.gov.lk).

What you need. The person's consent and identification.

What goes wrong. Appointing a director who lives overseas. Leaving the role unfilled when the person resigns. Forgetting what the role is for: on request, the company or the Registrar must make the beneficial ownership details available to the Attorney-General, the Financial Intelligence Unit, the Director-General of Customs, the Commissioner-General of Inland Revenue, investigating and prosecuting authorities, public procurement authorities and regulators [1]. The authorised person is the one who answers.

How long. A short board resolution and the filing.

Instrument: Companies Act, s.130C(1) to (3); Regulations No. 1(I) of 2026, reg 4. Official link: Act No. 12 of 2025. Last verified: 15 Oct 2026.

Step 6. Keep the register and file on time, because every late week costs Rs 1,000

What to do. Keep the register of beneficial owners at the registered office and keep the records for at least ten years [4]. File every form within the period set for it. From 22 October 2026, reg 10 as replaced by Regulations No. 1(II) of 2026 says a form not submitted within the period prescribed for it attracts "a penalty payment of one thousand rupees (Rs. 1,000/-) per week", charged and collected by the Registrar, with any part of a week counted as a full week [7]. Regulation 4 (a later BO 5 change) and regulation 5 (BO 6) state no period of their own, so how the charge applies to those forms is not settled. Four weeks late costs Rs 4,000 and ten weeks Rs 10,000. From 9 to 21 October 2026 the first version of reg 10 doubled the charge each week with no ceiling [2]; the new regulations do not say how weeks of delay in that period are charged, so check the payment screen. Separately, the Act makes failures an offence at two levels. For an existing company that does not report under s.130H, the penalty is a fine of up to Rs 50,000, imprisonment of up to six months, or both (s.130H(4)) [4]. Section 130G is heavier: failing to keep the register or to obtain and update the details under s.130A(1), (3), (4), (7) or (8), or knowingly giving false details, withholding a beneficial owner or making a false entry, carries a fine of up to Rs 1 million, imprisonment of up to ten years, or both, and directors and officers are deemed liable unless they show due diligence [4].

Where. The register at the registered office; filings on the Beneficial Ownership System (bo.drc.gov.lk).

What you need. The register and a diary of filing dates.

What goes wrong. Treating a few weeks' delay as minor. Each week or part week adds Rs 1,000, and the s.130H(4) offence sits on top.

How long. A monthly check of the register. A director who signs off a filing should also check the figures in it, because s.130G(2) deems every director and officer to have committed the offence unless they prove it happened without their knowledge or that they exercised all due diligence [4].

Instrument: Companies Act, ss.130A(4) and (5), 130G, 130H(4); Regulations No. 1(I) of 2026, reg 10, as replaced by Regulations No. 1(II) of 2026, reg 3. Official link: Registrar's post of 22 October 2026. Last verified: 22 Oct 2026.

Related: Beneficial ownership regulations 2026: what 2509/67 changed.

Frequently asked questions

Is the threshold still 25 percent?

No. It is 10 percent or effective control under s.130J [1].

Do offshore or overseas companies registered in Sri Lanka have to file?

Yes. Section 130A(10) applies ss.130A to 130J to an offshore company incorporated outside Sri Lanka and registered under the Act, and to an overseas company registered under the Act [4].

Which regulations apply now?

Regulations No. 1(I) of 2026, Gazette 2509/67, in force from 9 October 2026, as amended from 22 October 2026 by Regulations No. 1(II) of 2026, Gazette 2511/47 [7]. The March 2026 regulations in Gazette 2480/48 were rescinded from 8 October 2026 [2] [5].

When did the regime start?

The Act's beneficial ownership provisions came into operation on 30 March 2026 [6].

What does a late filing cost?

From 22 October 2026, Rs 1,000 for each week or part week the form is late, under reg 10 as replaced by Regulations No. 1(II) of 2026. The Act's s.130H(4) offence still applies to a late BO 7 [7] [4].

Talk to us. If your share structure is layered, or your BO 7 is now late, our company secretarial team can map the owners and file the forms; book a consultation at our contact page. New companies should also read our guide to the company registration process, and our business registration team handles incorporations.

WinCore Pvt Ltd

This guide is general information on the law as at 15 October 2026 and is not advice on your specific situation.

References

1. Parliament of Sri Lanka. Companies (Amendment) Act, No. 12 of 2025, ss.130B, 130C and 130J. https://www.parliament.lk/uploads/acts/gbills/english/6389.pdf . Primary. Accessed 15 October 2026.

1. Minister of Trade, Commerce, Food Security and Cooperative Development. Companies (Beneficial Ownership) Regulations, No. 1(I) of 2026, Gazette Extraordinary No. 2509/67 (9 October 2026), regs 1 to 11, made on 9 October 2026 under s.527 read with ss.130A, 130C, 130D, 130H and 130I, as posted by the Department of the Registrar of Companies at https://drc.gov.lk/en/?p=5001 with the gazetted text at https://drive.google.com/file/d/1v3jBw9yrmEX3U1g-dvD_q_jtAq5lL5hH/view . Primary. Accessed 15 October 2026. Not yet listed on documents.gov.lk at that date.

1. Department of the Registrar of Companies. Extension of Deadline for Submission of Beneficial Ownership Information (30 September 2026). https://drc.gov.lk/en/?p=4955 . Primary. Accessed 15 October 2026.

1. Parliament of Sri Lanka. Companies (Amendment) Act, No. 12 of 2025, ss.130A, 130G and 130H. https://www.parliament.lk/uploads/acts/gbills/english/6389.pdf . Primary. Accessed 15 October 2026.

1. Government of Sri Lanka. Companies (Beneficial Ownership) Regulations, No. 1 of 2026, Gazette Extraordinary No. 2480/48 (21 March 2026), now rescinded. https://documents.gov.lk/api/content-file-proxy?file=/extra-gazette-content/2480-48_E_1784568050.pdf . Primary. Accessed 15 October 2026.

1. Government of Sri Lanka. Order under the Companies (Amendment) Act, No. 12 of 2025, Gazette Extraordinary No. 2480/47 (21 March 2026), operation from 30 March 2026. https://documents.gov.lk/api/content-file-proxy?file=/extra-gazette-content/2480-47_E_1784568049.pdf . Primary. Accessed 15 October 2026.

1. Acting Minister of Trade, Commerce, Food Security and Cooperative Development. Companies (Beneficial Ownership) Regulations, No. 1(II) of 2026, Extraordinary Gazette No. 2511/47 (21 October 2026, number handwritten on the Registrar's copy), regs 1 to 4, in operation from 22 October 2026. https://drive.google.com/file/d/1zQMPo8yAMzOb6PH4rzVxxEcoLN_S6Kc2/view. Primary. Accessed 22 October 2026.