Sri Lanka, renowned for its cultural richness and diverse natural beauty, has long been a global tourist hotspot. However, the aftermath of the COVID-19 pandemic has posed economic challenges, affecting nations worldwide, including Sri Lanka. In response, there’s a noticeable surge in entrepreneurial initiatives and private company registrations, reflecting a collective effort to alleviate the economic strain. The country’s high employment rate and its appeal as a tourist destination make it an attractive market for entrepreneurs, fostering a conducive environment for new ventures. Amidst various corporate entities, private limited company registration in Sri Lanka stands out as the prevalent choice for business registration in Sri Lanka, underlining their popularity and legal significance in the post-pandemic recovery phase. In this blog, we shall see the company registration procedure in Sri Lanka.
Required Documents for Company Registration Procedure in Sri Lanka
The documents needed to undertake the company registration procedure in Sri Lanka are:
1. Identity Proof:
A valid driving licence or any other government-authorised photo ID of the directors.
2. Passport Copy:
Copy of the valid passport of the directors.
3. PAN Card (For Indian Nationals):
PAN card if the directors or officeholders are of Indian nationality.
4. Proof of Address:
Documents such as electricity bills, water bills, etc., serving as proof of address.
5. Specimen Signature:
Specimen signature of the directors or officeholders.
6. Company Name:
Provide the chosen name for the company.
Detailed Company Registration Procedure in Sri Lanka
The comprehensive company registration procedure in Sri Lanka involves the mentioned steps:
1. Name of the Business:
Choose a unique name for the company. Verify the availability of the chosen name on the Registrar of Companies website to ensure it is not already in use. It is advisable to have 2-3 alternative names in case the primary choice is unavailable. Once a name is finalised, it is reserved with the RoC, and this reservation is valid for a period of 3 months.
2. Select the Type of Business Entity:
In Sri Lanka, various business entities cater to different needs and preferences. The business owner must carefully choose the appropriate business structure based on the company’s goals and the number of members involved. The available business models include:
- Private Limited Company
- Public Limited Company
- Partnership Companies
- LLP Firm (Limited Liability Partnership)
- Sole Proprietorship
- Overseas Company
- Offshore Company
The business owner has the flexibility to select the most suitable structure from the options mentioned above, aligning with the specific requirements and objectives of the business.
3. Particulars Pertaining to the Directors and Shareholders:
When undertaking the company registration procedure in Sri Lanka, detailed information about the directors, including their names and contact details, must be provided. Additionally, directors or shareholders are required to submit necessary identification and address proofs to the Registrar of Companies for verification.
4. Filing of Forms:
After the approval of the company name, the applicant needs to submit the following forms to the Department of Registrar of Companies:
a. Company Registration – Form 1:
This form encompasses essential details about the company, including its name, type, and registered office.
b. Consent and Certificate of Director – Form 18:
Directors are required to provide their consent and obtain a certificate validating their appointment.
c. Consent and Certificate of Secretary/Secretaries – Form 19:
If applicable, the secretary or secretaries must furnish their consent and obtain a certificate verifying their appointment.
Alongside the forms mentioned above, the company’s Articles of Association must be submitted. The company can either customise its AoA or draft it based on the model provided in Table A of the Companies Act of Sri Lanka. The Articles of Association outline the internal rules governing the company’s operations and management. Companies have the flexibility to tailor these articles to suit their specific requirements.
5. Incorporation of the Company:
After the submission of required documents and forms to the Department of Registrar of Companies, the Registrar undertakes a thorough verification process. Upon successful verification, the Registrar issues the Certificate of Incorporation, officially recognising the establishment of the company.
6. Public Declaration of Company Formation
Upon the successful completion of the outlined procedures, it becomes imperative to disseminate formal notice regarding the incorporation of the company. This notification is to be prominently published within 30 days from the date of incorporation. It is essential that the announcement comprehensively covers pivotal details, including the company name, registration number, and the registered office address.
The mandatory platform for this announcement encompasses both the Government Gazette and at least one daily newspaper, with content presented in English, Sinhala, and Tamil. A duly attested copy of this publication must be submitted to the Registrar as an integral component of the requisite documentation.
7. Establishment of Banking Relations
With the Certificate of Incorporation, the subsequent step in company registration procedure in Sri Lanka involves the establishment of a corporate bank account with an authorised financial institution. Following this, the company is obligated to apply for a Tax Identification Number from the Inland Revenue Department. The comprehensive application must include Form 1, the Certificate of Incorporation, and the Articles of Association of the company.
The incorporation of a company marks the initial phase of launching a successful business. Therefore, swift registration is crucial to maximising the benefits and avoiding potential legal complications that could hinder the business’s growth.
For further information and to facilitate the process for company registration procedure in Sri Lanka, the official Registrar of Companies website can be accessed at: (https://eroc.drc.gov.lk/home/search)
Final Thoughts
The Company Registration Procedure in Sri Lanka is a thorough yet essential process for establishing a business. From selecting a unique name and determining the business structure to submitting requisite documents and forms, each step is integral to obtaining the Certificate of Incorporation. The mandatory public notice ensures transparency, and opening a bank account follows swiftly. While the process may seem intricate, seeking guidance is key to navigating it successfully. Timely registration is paramount for reaping maximum benefits and avoiding potential legal obstacles. So, the simplified procedure sets the foundation for a thriving business environment in Sri Lanka.
