COMPANIES ACT
AN ACT TO AMEND AND CONSOLIDATE THE LAW RELATING TO COMPANIES
Sections
1. Short title and date of operation.
2. Legal status and capacity of a company.
3. Different types of companies.
4. Method of incorporating a company.
5. Incorporation of a company.
6. Requirements as to name.
7. Restrictions on names.
8. Change of name.
9. Public notice of name.
10. Direction to change name.
11. Change of name upon change of status of company.
12. Use of company name and company number.
13. Contents of articles.
14. Application of model articles.
15. Adoption or amendment of articles.
16. Effect of articles.
17. Effect of statement of objects in articles.
18. Right of shareholders to a copy of the articles.
19. Method of contracting.
20. Attorneys.
21. Authority of directors, officers and agents.
22. No constructive notice.
23. preincorporation contracts may be ratified.
24. Warranties implied in preincorporation contracts.
25. Failure to ratify.
26. Authentication of documents by company.
27. Articles of a private company.
28. Company ceasing to be a private company.
29. Company may become a private company.
30. Private companies need not keep interests register.
31. Unanimous agreement of shareholders.
32. Application for incorporation of a company limited by guarantee.
33. Company limited by guarantee must have articles.
34. Power to dispose with "limited" in the name of charitable and other companies.
35. Provisions which apply to companies limited by guarantee.
36. Dating of prospectus.
37. Specific requirements as to particulars in prospectus.
38. Expert's consent to issue of prospectus containing statement by him.
39. Consent of bank or attorney-at-law or auditor necessary for inclusion of name in prospectus.
40. Registration of prospectus.
41. Civil liability for untrue in prospectus.
42. Criminal liability for untrue statements in a prospectus.
43. Document containing offer of shares or debentures for sale to be deemed a prospectus.
44. Interpretation of provisions relating to prospectuses.
45. Prohibition of allotment unless minimum subscription is received.
46. Effect of irregular allotment.
47. Applications for and allotment of shares and debentures.
48. Construction of reference to offering shares or debentures to the public.
49. Nature and types of shares.
50. Initial shares.
51. Issue of shares.
52. Consideration for issue of shares.
53. Pre-emptive rights to new issues.
54. Method of issuing shares.
55. Calls on shares.
56. Distributions.
57. Solvency test.
58. Stated capital.
59. Reduction of stated capital.
60. Dividends.
61. Recovery of distributions.
62. Reduction of shareholder liability to be a distribution.
63. Company may acquire or redeem its own shares.
64. Purchase of own shares.
65. Enforceability of contract to purchase shares.
66. Meaning of "redeemable".
67. Redemption option of company.
68. Redemption at the option of the shareholder.
69. Redemption on fixed date.
70. Restrictions on giving financial assistance.
71. Transactions not prohibited by section 70.
72. Restriction on subsidiary holding shares in holding company.
73. Transfer not to be registered except on production of instrument of transfer.
74. Transfer by legal representative.
75. Registration of transfer at the request of transferor.
76. Notice of refusal to register transfer.
77. Certification of transfers.
78. Duties of company with respect to issue of certificates.
79. Certificate to be evidence of title.
80. Evidence of grant of probate, &c.
81. Right of debenture holders and shareholders to inspect register of debenture holders and to have copies of any trust deed.
82. Directors prohibited from acting as trustees.
83. Perpetual debentures.
84. Power to reissue redeemed debentures in certain cases.
85. Specific performance of contracts to subscribe for debentures.
86. Meaning of "shareholder".
87. Liability of shareholder.
88. Liability for calls.
89. Shareholders must agree to increase in liability.
90. Exercise of powers reserved to shareholders.
91. Exercise of powers by ordinary resolution.
92. Powers exercised by special resolution.
93. Shareholder may require company to purchase shares.
94. Notice requiring purchase.
95. Purchase by company.
96. Purchase of shares by third party.
97. Court may grant exemption.
98. Court may grant exemption if company is insolvent.
99. Alteration of shareholder rights.
100. Shareholder may require company to purchase shares.
101. Action not invalid.
102. Registration of charges created by companies registered in Sri Lanka.
103. Unregistered charges void in certain cases.
104. Duty of company to register charges existing on property acquired.
105. Register of charges to be kept by Registrar.
106. Endorsement of certificate of registration on debentures.
107. Entries of satisfaction and release.
108. Rectification of register of charges.
109. Copies of instruments creating charges to be kept by company.
110. Company's register of charges.
111. Review of Register of charges.
112. Application of this Part to charges and property to be acquired by an overseas company.
113. Registered office of a company.
114. Change of registered office.
115. Requirement to change registered office.
116. Location of company records.
117. Form of records.
118. Inspection of records by directors.
119. Inspection of company records by shareholders.
120. Public inspection of company records.
121. Manner of inspection.
122. Copies of documents.
123. Company to maintain share register.
124. Place of share register.
125. Stamp duties in case of shares registered in a register outside Sri Lanka.
126. Index of shareholders.
127. Power to close register.
128. Power of court to rectify register.
129. Trusts not to be entered on share register.
130. Share register to be evidence.
131. Annual return.
132. Declaration and certificate to be sent by private company with annual return.
133. Annual general meeting.
134. Convening of extraordinary general meeting on requisition.
135. Length of notice for calling meetings.
136. Provisions as to meetings and votes.
137. Power of court to order meeting.
138. Representation of companies at meetings of other companies and of creditors.
139. Proxies.
140. Right to demand a poll.
141. Voting on a poll.
142. Circulation of shareholder's resolutions on requisition.
143. Special resolutions.
144. Resolution in lieu of meeting.
145. Resolutions requiring special notice.
146. Resolutions passed at adjourned meetings.
147. Minutes of proceedings of meetings of shareholders and directors.
148. Duty to keep accounting records.
149. Place where accounting records are kept.
150. Obligation to prepare financial statements.
151. Contents and form of financial statements.
152. Obligation to prepare group financial statements.
153. Contents and form of group financial statements.
154. Appointment of auditor.
155. Auditor's fees and expenses.
156. Appointment of partnership as auditor.
157. Qualifications of auditors.
158. Automatic reappointment.
159. Appointment of first auditor.
160. Replacement of auditor.
161. Statement by person ceasing to hold office as auditor.
162. Auditor to avoid conflict of interest.
163. Auditor's report.
164. Auditor's access to information.
165. Auditor's attendance at shareholders' meeting.
166. Obligation to prepare annual report.
167. Sending of annual report to shareholders.
168. Contents of annual report.
169. Failure to send reports &.
170. Registration of financial statements.
171. Balance sheet date.
172. Investigation of company's affairs on application of shareholders.
173. Investigation of company's affairs in other cases.
174. Power of inspectors to carry out investigation into affairs of related companies.
175. Production of documents and evidence at investigation.
176. Inspector's report.
177. Proceedings on inspector's report.
178. Expenses of investigation of company's affairs.
179. Inspector's report to be evidence.
180. Appointment and powers of inspectors to investigate ownership of company.
181. Power to require information as to persons interested in shares or debentures.
182. Power to impose restrictions on shares or debentures.
183. Registrar's powers to verify assets and liabilities.
184. Management of company.
185. Major transactions.
186. Delegation of powers.
187. Duty of directors to act in good faith and in the interests of company.
188. Directors to comply with Act and company's articles.
189. Directors standard of care.
190. Use of information and advice.
191. Meaning of "interested".
192. Disclosure of interest.
193. Avoidance of transaction.
194. Effect on third parties.
195. Non- application of sections 192 and 193 in certain cases.
196. Interested director may vote.
197. Use of company information.
198. Meaning of "relevant interest".
199. Relevant interests to be disregarded in certain cases.
200. Disclosure of share dealing by directors.
201. Number of directors.
202. Qualification of directors.
203. Director's consent required.
204. Appointment of first and subsequent directors.
205. Appointment of directors to be voted on individually.
206. Removal of directors.
207. Director ceasing to hold office.
208. Resignation of last remaining director.
209. Validity of director's acts.
210. Age limit for directors.
211. Section - 211
212. Section - 212
213. Persons prohibited from managing companies.
214. Court may disqualify directors.
215. Proceedings of board.
216. Remuneration and other benefits.
217. Restrictions on loans to directors.
218. Indemnity and insurance.
219. Duty of directors on insolvency.
220. Duty of directors on serious loss of capital.
221. Secretary.
222. Qualifications of secretary to be prescribed.
223. Register of directors and secretaries.
224. Oppression.
225. Mismanagement.
226. Who may make an application.
227. Power of court to act under section 224 or section 225 during winding up proceedings.
228. Powers of court on application under section 224 or section 225.
229. Effect of alteration of articles of company by order under section 224 or 225.
230. Addition of respondents to application under section 224 or section 225.
231. Consequences of termination or modification of certain agreements.
232. Extended meaning of "shareholder".
233. Restraining orders.
234. Derivative actions.
235. Costs of derivative action to be met by company.
236. Powers of court where leave is granted.
237. Compromise, settlement or continuance of derivative action.
238. Ratification of certain actions of directors.
239. Amalgamations.
240. Amalgamation proposal.
241. Approval of amalgamation proposal.
242. Short form amalgamation.
243. Registration of amalgamation proposal.
244. Certificate of amalgamation.
245. Effect of certificate of amalgamation.
246. Power to acquire shares of shareholders dissenting from scheme or contract approved by majority.
247. Interpretation.
248. Compromise proposal.
249. Notice of proposed compromise.
250. Effect of compromise.
251. Variation of compromise
252. Powers of court.
253. Effect of compromise in liquidation of a company.
254. Costs of compromise.
255. Interpretation.
256. Court approval of arrangements, amalgamation and compromises.
257. Court may make additional orders.
258. Application of Part VIII.
259. Application of section 253 to compromise approved under this Part.
260. Interpretation.
261. Company incorporated for business outside Sri Lanka.
262. Grant of certificate of registration to off-shore company.
263. Continuation of business of offshore company.
264. Prohibition on carrying on business in Sri Lanka.
265. Cessation of business as an off-shore company.
266. Definition of contributory.
267. Modes of winding up.
268. Power of liquidator to enforce liability of share holders and former shareholders.
269. Liability of former shareholders for unpaid calls.
270. Circumstance in which a company may be wound up by the court.
271. Definition of inability to pay debts.
272. Application for winding up.
273. Powers of court on hearing petition.
274. Power to stay or restrain proceedings against a company.
275. Avoidance of disposition of property &c. after commencement of winding-up.
276. Avoidance of attachments &c.
277. Commencement of winding up by the court.
278. Copy of order to be forwarded to Registrar.
279. Actions stayed on winding up.
280. Effect of winding up order.
281. Official receiver.
282. Appointment of official receiver by court in certain cases.
283. Statement of company's affairs to be submitted to official receiver.
284. Report by official receiver.
285. Power of court to appoint liquidators.
286. Appointment and powers of provisional liquidator.
287. Appointment style, &c. of liquidators.
288. Provisions where person other than official receiver is appointed a liquidator.
289. General provisions as to liquidators.
290. Custody of company's property.
291. Vesting of property of company in liquidator.
292. Powers of liquidator.
293. Exercise and control of liquidator's powers.
294. Books to be kept by liquidators.
295. Payments by liquidator into bank.
296. Audit of liquidator's accounts.
297. Control of Registrar over liquidator.
298. Release of liquidators.
299. Meetings of creditors and contributories to determine whether committee of inspections shall be appointed.
300. Constitution and proceedings of committee of inspection.
301. Powers of court where there is no committee of inspection.
302. Power to stay winding up.
303. Settlement of list of contributories and application of assets.
304. Delivery of property to liquidator.
305. Payment of debts due by contributory to company and extent to which set off is allowed.
306. Payment into bank of moneys due to company.
307. Appointment of special manager.
308. Inspection of books by creditors and contributories.
309. Power to order costs of winding up to be paid out of assets.
310. Power to summon persons suspected of having property of company.
311. Power to order public examination of promoters, directors &c.
312. Person or officer being examined to be represented by an attorney-at- law, &c,.
313. Power to arrest absconding contributory.
314. Powers of court cumulative.
315. Delegation to liquidator of certain powers of court.
316. Dissolution of a company.
317. Manner of enforcing order of court.
318. Enforcement of winding up order in another court.
319. Circumstances in which a company may be wound up voluntarily.
320. Notice of resolution to wind up voluntarily.
321. Commencement of voluntary winding up.
322. Effect of voluntary winding up on business and status of company.
323. Avoidance of transfers, &c., after commencement of voluntary
324. Statutory declaration of solvency in case of proposal to wind up voluntarily.
325. Provisions relating to a shareholders' voluntary winding up.
326. Power of company to appoint and fix remuneration of liquidators.
327. Power to fill vacancy in office of liquidator.
328. Power of liquidator to accept shares &c. in consideration for sale of property of company.
329. Duty of liquidators to call creditors' meeting in case of insolvency.
330. Duty of liquidator to call general meeting at end of each year.
331. Final meeting and dissolution.
332. Alternative provision as to annual and final meetings in case of insolvency.
333. Provisions applicable to a creditors' winding up.
334. Meeting of creditors.
335. Appointment of liquidator.
336. Appointment of committee of inspection.
337. Fixing of liquidators' remuneration and ceasing of directors' powers.
338. Power to fill vacancy in office of liquidator.
339. Application of section 328 to a creditors' voluntary winding up.
340. Duty of liquidator to call meetings of company and of creditors at end of each year.
341. Final meeting and dissolution.
342. Provisions applicable to every voluntary winding up.
343. Distribution of property of company.
344. Powers and duties of liquidator in voluntary winding up.
345. Power of court to appoint and remove liquidator in voluntary winding up.
346. Notice by liquidator of his appointment.
347. Arrangement when binding on creditors.
348. Power to apply to court to have question determined or powers exercised.
349. Costs of voluntary winding up.
350. Saving for rights of creditors and contributories.
351. Power to order winding up subject to supervision.
352. Effect of petition for winding up subject to supervision.
353. Applications of section 275 and 276 to winding up subject to supervision.
354. Power of court to appoint or remove liquidators.
355. Effect of supervision order.
356. Admissible claims.
357. Claims by unsecured creditors.
358. Rights and duties of secured creditors.
359. Ascertainment of amount of claim.
360. Claim not of an ascertained amount.
361. Fines, penalties, or recoveries.
362. Claims relating to debts payable after commencement of winding up.
363. Mutual credit and set-off.
364. Interest on claims.
365. Preferential claims.
366. Claims of other creditors and distribution of surplus assets.
367. Transactions having preferential effect.
368. Voidable charge.
369. Uncommercial transactions.
370. Procedure for setting aside voidable transactions and charges.
371. Other orders.
372. Additional provisions relating to setting aside of transactions and charges.
373. Interpretation in relation to preferences &.
374. Fraud &c. in anticipation of winding up.
375. Fraudulent trading.
376. Power of court to require persons to repay money or return property.
377. Disclaimer of onerous property.
378. Restriction of rights of creditor as to execution or attachment in case of company.
379. Duty of fiscal as to goods taken in execution.
380. Offences by officers of companies in liquidation.
381. Liability where proper accounts are not kept.
382. Prosecution of delinquent officers and members of the company.
383. Qualifications of liquidators.
384. Corrupt inducement affecting appointment as liquidator.
385. Enforcement of duty of liquidator to make returns, &c.,
386. Notification that a company is in liquidation.
387. Exemption of certain documents from stamp duty on winding up of companies.
388. Books of company to be evidence.
389. Disposal of books and papers of the company.
390. Information as to pending liquidation.
391. Resolutions passed at adjourned meetings of creditors and contributories.
392. Meetings to ascertain wishes of creditors or contributories.
393. Power of court to declare dissolution of company void.
394. Registrar may strike off defunct company from register.
395. Property of dissolved company to vest in the State.
396. Establishment of Companies Liquation Account.
397. Payments into and out of Companies Liquidation Account.
398. Refusal to supply essential services prohibited.
399. Rules and fees for winding up.
400. Interpretation.
401. Power of board to appoint administrator.
402. Notice to charge holders of appointment of administrator.
403. Effect of appointment of administrator.
404. Duty of administrator to summon initial meeting.
405. Effect of confirmation of administrator.
406. Statement of proposals.
407. Consideration of proposals by creditors' meeting.
408. Consequential orders where administrator cease to hold office.
409. Approval of substantial revisions to proposals.
410. Notice of appointment of administrator.
411. Notice of administration
412. Qualifications of administrator.
413. Validity of acts of administrator.
414. Consent to be appointmented.
415. Vacancy in office of administrator.
416. Powers of administrators.
417. Power to deal with charged property &c.,
418. General duties of administrator.
419. Discharge of administrator or variation of resolution appointing administrator.
420. Remuneration and expenses of administrator.
421. Liability of administrator.
422. Relief from liability.
423. Obligations of company and directors to provide information &c.
424. Creditors' committee.
425. Protection of interests of creditors and share holders.
426. Application to administrator of provisions relating to receivers.
427. Company may grant floating charge.
428. Instrument creating floating charge.
429. Provisions of instrument creating floating charge.
430. Dealing with property subject to floating charge before attachment.
431. Ranking of floating charges.
432. Alteration and discharge of floating charges.
433. Circumstances in which floating charge attaches to property.
434. Interpretation.
435. Instrument may confer power to appoint receiver.
436. Qualifications of receivers.
437. Appointment of receiver under an instrument.
438. Extent of power to appoint a receiver.
439. Court may appoint a receiver.
440. Notice of appointment of receiver.
441. Notice of receivership.
442. Vacancy in office of receiver.
443. Powers of receivers.
444. Precedence among receivers.
445. Power to make calls on shares.
446. Execution of documents.
447. Obligations of company and directors.
448. Validity of acts of receivers.
449. Consent of mortgagee to sale of property.
450. General duties of receivers.
451. Duty of receiver selling property.
452. No defence or indemnity.
453. Duty in relation to money.
454. Accounting records.
455. First report by receivers.
456. Further reports by receiver.
457. Extension of time for preparing reports.
458. Persons entitled to receive reports.
459. Persons entitled to inspect reports.
460. Duty to notify breaches of any provisions of this Act.
461. Notice of end of receivership.
462. Preferential claims.
463. Powers of receiver on liquidation.
464. Liability of receiver.
465. Relief from liability.
466. Court supervision of receivers.
467. Court may terminate or limit receivership.
468. Orders to enforce receiver's duties.
469. Orders protecting property in receivership.
470. Refusal to supply essential services prohibited.
471. Appointment of officers.
472. Appeals from Registrar's decisions.
473. Registers to be kept.
474. Authentication of documents by seal.
475. Registration of documents, copies of documents, notices &c.
476. Translations of documents filed.
477. Fees.
478. Recovery of expenses and fees.
479. Fund.
480. Inspection, production and evidence of documents kept by Registrar.
481. Enforcement of duty of company to make returns to Registrar.
482. Unlawful disclosure of information relating to companies.
483. Production and inspection of books where an offence is suspected.
484. Registrar's power to call for information and to inspect books, registers and documents.
485. Application of Act to existing companies.
486. Provisions relating to articles of existing companies.
487. Provisions relating to company numbers of existing companies &c.
488. Interpretation.
489. Documents and particulars to be delivered to Registrar by overseas companies.
490. Power of overseas companies to hold lands.
491. Return to be delivered to Registrar where documents &c. altered.
492. Financial statements of overseas company.
493. Name of overseas company.
494. Obligation to state name and particulars of company.
495. Service on overseas company.
496. Registrar to be notified when company ceases to have place of business in Sri Lanka.
497. Liquidation of assets in Sri Lanka of overseas company.
498. Penalties for non-compliance.
499. Enforcement of duty to comply with provisions of this Part.
500. Dating of prospectus and particulars to be contained therein.
501. Provisions as to expert's consent and allotment.
502. Registration of prospectus.
503. Penalty for contravention of section 500, section 501 or section 502.
504. Civil liability for misstatements in prospectus.
505. Interpretation of provisions as to prospectuses.
506. Appointment &c. of Advisory Commission.
507. Companies Disputes Board.
508. Board members may mediate disputes.
509. Privilege in respect of mediations proceeding.
510. Fees payable in respect of mediation.
511. Penalty for false statement.
512. Penalty for falsification of records.
513. Penalty for improper use of word "Limited".
514. Compounding of certain offences.
515. Offences summarily triable.
516. Imposition and application of fines.
517. Savings as to private prosecutors.
518. Savings for privileged communications.
519. Prohibition of partnership with more than twenty members.
520. Procedure.
521. Grant of interim relief.
522. Savings for attorney-at-law and bankers.
523. Service of documents on company.
524. Documents to be received in evidence.
525. Costs in action by certain limited companies.
526. Power of court to grant relief in certain cases.
527. Regulations.
528. Sinhala text to prevail in case of inconsistency.
529. Interpretation.
530. Transitional provisions.
531. Savings.
532. Savings of pending proceedings for winding up.
533. Repeals.
534. Amendment of the First Schedule of Act, No. 10 of 1996.