SRI LANKA Law and Practice Contributed by: Ayanthi Abeyawickrama, Varners
3.3 Ongoing Reporting and Disclosure Obligations Private limited companies in Sri Lanka are subject to a number of ongoing reporting and disclosure obliga - tions under the Companies Act, No 7 of 2007, aimed at ensuring transparency, corporate accountability and regulatory compliance. Any change in company management, such as the appointment or resignation of directors or the com - pany secretary, must be reported to the Registrar of Companies by filing Form 20 within 20 working days of the change. Amendments to the articles of asso - ciation require the passing of a special resolution and must be filed along with the revised Articles within ten working days. All private companies are required to prepare annu - al financial statements. These financial statements must be prepared in accordance with the Sri Lan - ka Accounting and Auditing Standards Act, No 15 of 1995, and in compliance with relevant Sri Lanka Accounting Standards (SLFRS/LKAS). In addition, every company must file an annual return (Form 15) within 30 working days of its annual general meeting. This return must provide updated informa - tion on the company’s registered office, directors, shareholders, share capital and other key particulars. A significant new layer of disclosure has been intro - duced by the Companies (Amendment) Act, No 12 of 2025, read with the Companies (Beneficial Ownership) Regulation, No 1 of 2026, which became operational on 30 March 2026. Every company must now iden - tify its beneficial owners – broadly, any natural person who directly or indirectly holds or controls 10% or more of the shares or voting rights, or who otherwise exercises effective control – maintain a register of ben - eficial owners at its registered office, and file the pre - scribed particulars with the Registrar of Companies through a dedicated online portal. Companies incorporated before the operational date are required to comply within six months, and depos - itaries of licensed stock exchanges must notify the Registrar of holders of 10% or more. Limited ben - eficial ownership information is publicly accessible,
with fuller particulars available to regulators and, on application, under the Right to Information Act. The same amendment prohibits the issuance of bearer shares and share warrants to bearer, requiring exist - ing instruments to be converted into registered form. Non-compliance with the beneficial ownership obliga - tions is a criminal offence and may attract personal liability for directors and officers. Failure to comply with these reporting obligations may result in the imposition of penalties by the Registrar General of Companies. 3.4 Management Structures Most common legal entities, such as private and pub - lic companies, operate under a unitary (one-tier) board structure, in accordance with the Companies Act, No 7 of 2007. Under this structure, a single board of direc - tors is responsible for both the management of the company’s day-to-day affairs and the oversight of its strategic direction and compliance obligations. In private companies, directors frequently assume both executive and non-executive roles, and deci - sion-making is often closely aligned with sharehold - er interests, particularly in closely held companies. Shareholders exercise their rights primarily through resolutions passed at general meetings, including the appointment and removal of directors, approval of dividends, actioning of reserve rights, and amend - ments to the articles of association. There is no statutory provision under Sri Lankan law for a two-tier board structure (ie, a separate super - visory and management board), making the one-tier system the default and standard corporate govern - ance framework for companies incorporated in Sri Lanka. However, companies may internally assign functional roles (eg, managing director, non-executive chairman) or have multiple tiers of governing struc - tures to promote oversight and accountability, particu - larly in larger or regulated entities. This is generally the case in companies limited by guarantee. 3.5 Directors’, Officers’ and Shareholders’ Liability The liability of directors and officers is primarily gov - erned by the Companies Act, No 7 of 2007, which
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