Colombo, September 5, 2025 – The Speaker of Parliament, Dr. Jagath Wickramaratne, yesterday (August 4) endorsed the certificate on the Companies (Amendment) Bill, officially enacting it as the Companies (Amendment) Act No. 12 of 2025. The Bill, initially presented in Parliament on June 5 by the Minister of Trade, Commerce, Food Security, and Cooperative Development, was passed with amendments on July 23.
The new Act introduces a series of significant reforms aimed at modernizing company law in Sri Lanka, improving transparency, and strengthening regulatory oversight.
Key Provisions of the Act
- Single Shareholder Companies
Companies can now be incorporated with just one shareholder, simplifying business formation for entrepreneurs and small-scale investors. - Company Name Changes
The public notice period required when changing a company’s name has been extended to 20 working days, giving stakeholders more time to respond. - Ban on Bearer Shares
The issuance of bearer shares or bearer share warrants is now prohibited. Companies that have already issued such shares must notify the company and disclose the bearer’s details to the Registrar of Companies within 60 days. - Share Division Requirement
Companies are required to divide shares within 20 days of incorporation. - Beneficial Ownership of Shares
A new framework has been introduced to ensure greater transparency in shareholding:
- Directors and company secretaries must disclose beneficial ownership details to the Registrar.
- The Registrar will maintain official records and make them available to the public.
- Companies and the Registrar must provide beneficial ownership details to government authorities when requested.
- Clear definitions of “beneficial ownership” and “effective control” have been added.
- Regulatory Flexibility & Oversight
- The Registrar of Companies has been empowered to extend deadlines for document submissions.
- Deregistered companies may re-register within a specified timeframe and reclaim properties previously vested in the government.
- Disputes can now be referred more widely to the Company Disputes Board for resolution.
- New procedures have been set for the removal of directors.
- Administrative Improvements
- The Minister of Finance is authorized to provide allowances to certain Registrar of Companies officers.
- General penalties have been streamlined.
- Corrections have been made to errors in Sinhala, Tamil, and English texts of the Companies Act.
Modernizing Sri Lanka’s Business Environment
The Companies (Amendment) Act No. 12 of 2025 is expected to strengthen corporate governance, align Sri Lanka’s business regulations with global standards, and make the country a more attractive destination for both local and foreign investors.
Legal experts and business leaders have welcomed the inclusion of beneficial ownership transparency, noting that it will help combat money laundering, improve accountability, and create a more trustworthy investment environment.
