Company registration in Sri Lanka
WHAT IS THE REGISTRATION OF THE COMPANY?
Company Registration — a complex process that can not be done without the practical experience and expertise in this field. It is doubly difficult if you are a non-resident of the country.
HOW TO REGISTER A COMPANY IN SRI LANKA?
Only an attorney’s-at-law firm can prepare and submit the documents required for a company registration to the Registrar of Companies. The chosen law firm will also act as Company Secretaries of the registered legal entity. Applicant is only obligated to provide his passport, which is required under Sri Lankan law.
WHAT TYPES OF LEGAL ENTITIES ARE IN SRI LANKA?
There are several forms of legal entities:
- The most popular and versatile is a private limited company. Ownership does not involve restrictions on the minimum authorized capital, the citizenship of its owners, and can also be represented by one or more physical or legal persons. There can be up to seven Directors in such companies. Each director has an equal right of signature.
- Public company with limited liability, which requires at least seven shareholders in order to be registered. There are also no requirements for minimum authorized capital, but it is necessary for the company to appoint a secretary.
- Peoples company with an unlimited number of participants. The main condition for registration — the share of each shareholder shall not exceed 10% of the total shares. The company must have at least three directors with an annual mandatory election.
- Joint ventures, partnerships and holdings are few of the other forms of ownership.
WHERE TO START?
Name of the company is the first thing to be defined after the law firm had been selected. According to the legislation of Sri Lanka, company names can not be repeated, so an availability check should be performed. Consideration of the application usually takes two working days.
WHAT SHOULD BE INCLUDED INTO THE COMPANY CHARTER?
Adding all activities to the initial Charter is not a requirement in Sri Lanka. Therefore, in order to avoid unnecessary delays, we recommend that only the main company activities should be included. New activities can be added to the Charter when necessary.
WHAT TO DO NEXT?
Founders and directors are required to sign the Charter and all relevant documents. Then the company’s lawyers submit documents to the Registrar of Companies and tax authorities. It takes 3 – 5 working days to obtain a certificate of registration and a tax certificate.
HOW LONG WILL IT TAKE TO REGISTER A COMPANY?
The whole procedure of company registration takes about seven working days. Your presence is not necessary and signed documents can be sent by courier.
WHAT TO DO WHEN DOCUMENTS ARE RECEIVED?
It is necessary to open a bank account and to deposit the amount required for the initial share issue + minimum account balance, which is typically about 15,000 rupees. The standard initial share release is 100 shares at price of Rs 10 per share. Please note that the capitalized amount will be subject to a 0.5% fee. One working day is required to open a bank account.