Sri Lanka Beneficial Ownership System Guide
Understanding the BO 05, BO 07 Forms, and Compliance Framework
Sri Lanka’s Beneficial Ownership (BO) System is a major compliance framework introduced to enhance corporate transparency and combat money laundering and terrorist financing. Governed by the Companies (Amendment) Act No. 12 of 2025 and the Companies (Beneficial Ownership) Regulation No. 1 of 2026, it requires all companies to declare the actual individuals who own or control them.
1. What is a Beneficial Owner?
A beneficial owner is strictly defined as a natural person (not another company or trust) who:
- Holds 10% or more of the company’s shares or voting rights.
- Exercises effective control over the company’s management or policies.
2. Key Form Requirements: BO 05 & BO 07
To comply with the new regulations, companies must file specific forms through the government’s dedicated BO portal.
Form BO 05: Appointment of an Authorised Person
Before declaring your company's beneficial owners, you must appoint someone to manage this information.
- Purpose: Officially registers an "Authorised Person" for the company.
- Requirements: This individual must be a natural person residing in Sri Lanka. They serve as the legal point of contact and are responsible for maintaining the company's internal BO register and keeping it up to date.
- Process: The form must be filled out on the BO portal, downloaded, printed, signed by the relevant directors/officers, scanned, and uploaded back into the system.
Form BO 07: Initial Submission for Existing Companies
If your company was already incorporated prior to these new laws, Form BO 07 is your primary filing document.
- Purpose: Used to declare the initial beneficial ownership details for existing companies (those already incorporated under the Companies Act No. 7 of 2007 or former laws).
- Details Required: Full identifying details of all beneficial owners, including their National ID or Passport, tax numbers (TIN), residential addresses, and the exact percentage of their ownership or nature of control.
- Note: If you are incorporating a brand-new company, you will file Form BO 01 instead of BO 07 during the incorporation process.
3. How the BO System Works (Step-by-Step)
The entire process is managed digitally alongside physical record-keeping requirements.
- Preparation: Identify your beneficial owners (gather IDs, TINs, and share certificates) and officially appoint your resident Authorised Person.
- Portal Access: Log into the specialized BO System (
bo.drc.gov.lk) using your existing eROC (e-Register of Companies) credentials. - Submit BO 05: Complete and upload the Authorised Person declaration first.
- Submit BO 07: File the actual beneficial ownership details for your existing company.
- Maintain an Internal Register: Submitting online is not enough. The Authorised Person must maintain a physical, up-to-date Beneficial Ownership Register at the company’s registered office in Sri Lanka.
4. Deadlines, Penalties & Privacy
The Deadline: Existing companies must establish their BO register, appoint an Authorised Person (BO 05), and submit their BO 07 form by March 31, 2026.
Ongoing Updates: Any changes to beneficial ownership (e.g., share transfers) must be updated in the internal register and filed with the Registrar within 30 days of the change.
Penalties for Non-Compliance: Failure to comply is a criminal offence. Penalties apply personally to the directors and officers of the company (including fines and potential imprisonment), not just to the corporate entity.
Privacy Note: The full details of beneficial owners are heavily restricted. They are only accessible to authorized bodies (e.g., Financial Intelligence Unit, Inland Revenue, Customs). The general public can only access limited information unless they file a formal Right to Information (RTI) request.
