Company registration act in Sri Lanka

Sri Lanka, once war-torn county is now at the verge of economic boom. The nation stood up from the rubble and reached to a level of economic stability in recent years. A nation reaching 21 million people, has the GDP over 237 billion US dollars. The country has a stable GDP growth rate of 6.4%, making it an impressive figure for several years.

The nation is ensuring favorable environment for new businesses. The company law in this country has several rules and policies. Those policies are necessary to register a new company in Sri Lanka. Commerce department and government authorities suggest to follow those rules. The companies act, no. 07 of 2007 clauses several strict policies on company registration. This article will explain each steps of act no. 07 of 2007, Company registration law.

1. Naming the Company

Company registration act demands a unique name enlistment for the company. It is compulsory and the initial task if planning to start an official business. It is possible that another existing company has duplicate name as yours. So, it is wise to select two pairs of company names to prevent possible similarities. Be cautious that your chosen name will get rejected if same names found. You need to fill up a company name registration form or FORM-A16. Submit the completed form to department of the Registrar of Companies. Authorities will go through necessary cross checking. If all goes well, you will receive the approval confirmation in three working days.

2. Filling up company registration forms

Once company name approved, get ready with three company registration form. These are form-1, form-18 and form-19. Form-1 asks for company details, type, company's name approval number, address, owner details. Form-18 focuses on taking data of director's details. Form- 19 takes detail information of company's secretary. Under Section 475, you must fill-up these three forms to complete registration processes. These are e-forms. Fill these forms up with care followed by online submission.

3. Article of Association

It is an agreement policy which act as sole constitutional document of a company. as that the owner need to sign up. A company can either establish their own policy or adopt the default model. The Company Act 7 of 2007 suggests compulsory availability of this article. This helps to maintain rights and obligations among managements and administrations in company.

4. Create bank account

You need to open a corporate bank account. Using this account company will carry out all its relevant capital transactions. Generally, bank takes to at most seven working days to open a corporate account. You can enjoy internet banking in this account but cannot claim a debit or credit card.

5. Public noticing

On finishing the steps above, it’s time for you to publish a public notice. Every company must publish this notice on at least three national newspapers. The notice provides information about company's name, address, registration no. contact no. etc. You must place this notice within 30 days of registration completion.

6. Optional BOI approval

This procedure is not applicable for all businesses. If you have a private limited company and doesn't need foreign staffs, BOI is not applicable. Board of Investment approval is usually necessary for manufacturing, retail or brunch offices. If planning to higher foreign staffs, this approval is necessary. There are several BOI approval procedures. To know these, keep in touch with S & F Consulting farm. Legal experts and Business specialists are ready to help you out in any business queries.

FAQ

Q. Do I have to follow every steps of Company law Act 07 of 2007?

A. Yes, except of BOI approval, which is necessary for few specific businesses only

Q. How many days needed to approve the company name?

A. If company name is unique, and all papers are alright, it takes 2 to 3 working days.

Q. How many days needed to create a corporate bank account

A. Sri Lankan national banks take 5 to 7 days. Foreign banks sometime take more than 7 days due to extensive verification procedures.