Sri Lanka Companies Act

Companies Act, No.
17 of 1982
[Certified on 20th May, 1982]
L.D.—0. 54/81
AN ACT TO AMEND AND CONSOLIDATE THE LAW RELATING TO COMPANIES
BE it enacted by the Parliament of the Democratic Socialist Republic of Sri
Lanka as follows: —
1. (1) This Act may be cited as the Companies Act, No. 17 of 1982. Short title and
date of
(2) (a) The provisions of this Act other than Part V shall come into operation operation.
on such date (hereinafter referred to as the " appointed date ") as the Minister
may, by Order published in the Gazette, appoint.
(b) The provisions of Part V of this Act shall come into operation on such date
as the Minister may, by Order published in the Gazette, specify.
PART I
INCORPORATION OF COMPANIES AND MATTERS INCIDENTAL THERETO
MEMORANDUM OF ASSOCIATION
2. (1) Any seven or more persons, or where the company to be formed is to be a
private company, any two or more persons, or where the company to be formed
is a people's company, any fifty or more persons, associated for any
lawful purpose may, by subscribing their names to a memorandum of
association (which shall be printed) and otherwise complying with the
requirements of this Act in respect of registration, form an incorporated
Mode of forming
company, with or without limited liability. incorporated
company.
(2) Such a company may be either—
(a) a company having the liability of its members limited by the memorandum
to the amount, if any, unpaid on the shares respectively held by them (in
this Act referred to as "a company limited by shares ") ; or
(b) a people's company as defined in Part VII of this Act; or
(c) a company having the liability of its members limited by the memorandum
to such amount as the members may respectively thereby undertake to
contribute to the assets of the company in the event of its being wound up
(in this Act referred to as " a company limited by guarantee ") ; or
3—A 63752 (82/06)
(d) a company not having any limit on the liability of its members (in this Act
referred to as "an unlimited company").
2 Companies Act, No. 17 of 1982
3. (1) The memorandum of every company shall state—

Requirements
(a) the name of the company, with "Limited" as the last word of the name in with respect to
memorandum.
the case of a public limited company, and with "(Private) Limited" as the
last words of the name in the case of a private limited company, where
such companies are limited by shares, and with "(Guarantee) Limited "
as the last words of the name in the case of a company limited by
guarantee, and with " (People's) Limited" as the last words of the name
in the case of a people's company;
(b) the district in which the registered office of the company is to be situate ;
(c) the objects of the company.
(2) The memorandum of a company limited by shares or by guarantee shall also state that the
liability of its members is limited.
(3) The memorandum of a company limited by guarantee shall also state that
each member undertakes to contribute to the assets of the company in the event
of its being wound up while he is a member, or within one year after he ceases to
be a member, for payment of the debts and liabilities of the company contracted
before he ceases to be a member, and of the costs, charges and expenses of
winding up, and for adjustment of the rights of the contributories among
themselves, such amount as may be required, not exceeding a specified amount.
(4) In the case of a company having a share capital—

(a) the memorandum shall, unless the company is an unlimited company, state the amount
of share capital with which the company proposes to be registered and the division
thereof into shares of a fixed amount;
(b) no subscriber of the memorandum shall take less than one share;
(c) each subscriber shall write opposite to his name the number of shares he takes.
4. (1) The memorandum of every company shall, in stating the Further

requirements
objects of the company, set out specifically, the primary objects of
with respect to
the company, that is to say, the objects which the subscribers or memorandum.
promoters intend that the company should carry out during the
period of five years from the date of the commencement of business
by the company.
(2) The memorandum of every company shall state the ancillary

powers proposed to be exercised or which may need to be exercised
by the company for the purposes of carrying out its primary objects.
(3) Nothing in the provisions of subsection (1) or subsection (2)

shall be deemed or construed to preclude the memorandum from
containing a separate statement of objects, not being primary
objects, or of powers (whether general or special), in addition to
those specifically set out under the provisions of subsections (1) and
Stamp and
(2) :
signature of
Provided, however, that no such object or power may be carried out memorandum.
or exercised by the company except with the prior sanction of a

special resolution of the company.
Restriction on
alteration of
(4) The preceding provisions of this section shall apply in the
memorandum.
case of companies formed on or after the appointed date.
5. The memorandum shall bear a stamp of the prescribed value

and shall be signed by each subscriber in the presence of a notary Mode in which
public who shall witness the signature of each signatory and affix his and extent to which
objects of company
seal. may be altered.
6. A company shall not alter the conditions contained in its
memorandum except in the cases, in the mode and to the extent for
which express provision is made in this Act:
Provided that, in the case of a company registered prior to the
appointed date, the Registrar may alter the name of the company in
accordance with the provisions of paragraph (a) of subsection (1) of
section 3.
7. (1) A company may, by special resolution, alter the provisions of

its memorandum with respect to the objects of the company, so far
as may be required to enable it—
(a) to carry on its business more economically or more
efficiently ; or
(b) to attain its primary objects by new or improved means; or
(c) to enlarge or change, the local area of its operations; or

(d) to carry on some business which under existing circumstances
may conveniently or advantageously be combined with the
business of the company; or
(e) to restrict or abandon any of the primary objects specified in
the memorandum; or
(f) to sell or dispose of the whole or any part of the undertaking

of the company; or
(g) to amalgamate with any other company or body of persons:
Provided that, where an application is made to the court in

accordance with the provisions of this section for the alteration to be
cancelled, it shall not have effect except in so far as it is confirmed
by the court.
(2) An application under the provisions of subsection (1) may be

made—
(a) by the holders of not less in the aggregate than fifteen per
centum in nominal value of the company's issued share
capital or any class thereof, or if the company is not limited
by shares, not less than fifteen per centum of the company's
members ; or
(b) by the holders of not less than fifteen per centum of the
company's debentures entitling the holders to object to alterations of
its objects :
Provided that such an application shall not be made by any person who has
consented to or voted in favour of the alteration.
(3) An application under the provisions of subsection (1) shall be
made within twenty-one days from the date on which the resolution
altering the company's objects was passed, and may be made on
behalf of the persons entitled to make the application by such one or
more of their number as they may appoint in writing for the purpose.
(4) On an application under the provisions of subsection (1) the

court may make an order confirming the alteration of the objects of
the company either wholly or in part and on such terms and
conditions as it thinks fit, and may, if it
thinks fit, adjourn the proceedings in order that an arrangement may

be made to the satisfaction of the court for the purchase of the
interests of dissentient members, and may give such directions and
make such orders as it may think expedient for facilitating or
carrying into effect any such arrangement:
Provided that no part of the capital of the company shall be
expended in any such purchase.
(5) The debentures entitling the holders to object to alterations of a

company's objects shall be any debentures secured by a floating
charge, which were issued or first issued before the appointed date,
or form part of the same series as any debentures so issued, and a
special resolution altering a company's objects shall require the same
notice to the holders of any such debentures as to members of the
company.
In default of any provisions regulating the giving of notice to
any such debenture holders, the provisions of the company's articles
regulating the giving of notice to members shall apply.
(6) In the case of a company which is by virtue of a licence from

the Registrar exempt from the obligation to use the word "Limited"
as part of its name, a resolution altering the company's objects shall
also require the same notice to the Registrar as to members of the
company.
(7) Where a company passes a special resolution altering its

objects—
(a) if no application is made under the provisions of subsection (1)
in respect of the alteration, it shall, within fifteen days from
the end of the period of making such an application, deliver
to the Registrar a printed copy of its memorandum as
altered; and
(b) if such an application is made it shall—
(i) forthwith give notice of that fact to the Registrar ; and
(ii) within fifteen days from the date of any order cancelling
or confirming the alteration, deliver to the Registrar a
certified copy of the order and, in the case of an order
confirming the alteration, a printed copy of the
memorandum as altered.
The court may by order at any time extend the time for the delivery of the
documents to the Registrar under the provisions of paragraph (b) of this subsection
for such period as the court may think proper.
(8) Where a company makes default in giving notice or delivering

any document to the Registrar as required under the provisions of
subsection (7), the company and every officer of the company who is
in default shall be guilty of an offence and shall be liable to a fine of
three hundred and fifty rupees.
(9) The validity of an alteration of the provisions of a company's

memorandum with respect to the objects of the company shall not be
questioned in any court or tribunal on the ground that it was not
authorized by the provisions of subsection (1), except in proceedings
taken for the purpose (whether under this section or otherwise) before
the expiration of twenty-one days from the date of the resolution in
that behalf; and where any such proceedings are taken otherwise than
under this section, the provisions of subsections (7) and (8) shall
apply in relation thereto as if they had been taken under this section,
an order declaring the alteration invalid were an order cancelling it,
and an order dismissing the proceedings were an order confirming the
alteration.
Articles
ARTICLES OF ASSOCIATION
prescribing
8. There shall in the case of every company be registered with rules
the memorandum, articles of association signed by the subscribers to for com-

panies.
the memorandum and setting out rules for the management of the
company unless such articles have adopted the rules set out in Table
A of the First Schedule hereto. Regulations
required
in case of
unlimited
company or
company
limited by
guarantee.
9. (1) In the case of an unlimited company, the articles shall state
the number of members with which the company proposes to be
registered and, if the company has a share capital, shall state the
amounts of share capital with which the company proposes to be
registered.
(2) In the case of a company limited by guarantee, the articles shall state the
number of members with which the company proposes to be registered.
(3) Where an unlimited company or a company limited by

guarantee has increased the number of its members beyond the
registered number, it shall, within fifteen days.
from the date the increase was resolved on or took place, give to the
Registrar in writing the notice of the increase, and the Registrar shall
record, the increase.
Where default is made in complying with the provisions of this
subsection the company and every officer of the company who is in
default shall be guilty of an offence and shall be liable to a fine of
three hundred and fifty rupees. Adoption and
application of
rules
set out in Table A
10. The articles of association of a company limited by shares may of First Schedule.
adopt all or any of the rules set out in Table A of the First Schedule
hereto.
Printing. stamp,
and signature of
articles.
11. Articles shall—

(a) be printed;
(b) be divided into paragraphs numbered consecutively;
(c) bear a stamp of the prescribed value;
Alteration of
(d) be signed by each subscriber of the memorandum of articles by
special
association in the presence of a notary public who shall resolution.
witness the signature of each signatory and affix his seal.
12. (1) Subject to the provisions of this Act and to the conditions
contained in its memorandum, a company may by special resolution
alter or add to its articles.
(2) Any alteration or addition made to the articles shall, subject to
the provisions of this Act, be as valid as if originally contained
therein; and be subject in like manner to alteration by special
resolution.
FORM OF MEMORANDUM AND ARTICLES
13. The form of— Statutory

forms
(a)the memorandum of association of a company limited, by of memo-
randum
shares, and articles.
(b) the memorandum and articles of association of a company

limited by guarantee and not having a share capital,
(c) the memorandum and articles of association of a company
limited by guarantee and having a share capital,
(d) the memorandum and articles of association of an unlimited
company having a share capital,
8 Companies Act, No, 17 of 1982
shall be respectively in accordance with the forms set put in Tables

B, C, D and E of the First Schedule hereto, or as near thereto as
circumstances permit.
REGISTRATION
14. Subject to the provisions of section 175, the memorandum and Registration of
memorandum and
the articles, if any, shall be delivered to the Registrar who shall articles.
retain and register them.
Effect of registration.
15. (1) On the registration of the memorandum of the company the
Registrar shall issue to such company a certificate authenticated by
the seal prepared under the provisions of section 390 that the
company is incorporated and, in the case of a limited company, the
company is limited.
(2) From the date of incorporation specified in the certificate of

incorporation, the subscribers of the memorandum, together with
such other persons as may from time to time become members of the
company, shall be a body corporate by the name contained in the
memorandum, capable forthwith of exercising all the functions of an
Power of
incorporated company, and having perpetual succession and a company to
hold lands
common seal, but with such liability on the part of the members to
contribute to the assets of the company in the event of its being
wound up as is referred to in this Act.
16. (1) A company formed for the purpose of promoting art, science,
religion, charity or any other like objects not involving the
acquisition of gain by the company or by its individual members, Conclusiveness
of certificate
of
incorporation.
shall not without a licence issued by the Registrar, hold more than
two acres of land, and the Registrar may, by licence, empower any
such company to hold lands in such quantity, and subject to such
conditions as he thinks fit.
(2) A licence issued by the Registrar under the provisions of
subsection (1) shall be in the prescribed form.
17. (1) A certificate of incorporation issued by the Registrar in

respect of any association shall be conclusive evidence that all the
requirements of this Act in respect of registration and of matters
precedent and incidental thereto have been complied with, and that
the association is a company authorized to be registered and duly
registered under this Act.
9 Companies Act, No.17 of 1982
(2) A statutory declaration by an attorney-at-law engaged in the

formation of the company, or by a person named in the articles as a
director or secretary of the company, of compliance with all or any
of the said requirements, shall be produced to the Registrar, and the
Registrar may accept such a declaration as sufficient evidence of
Registration of
compliance.
unlimited
company as
limited.
18. (1) A company registered as an unlimited company may register
under this Act as a limited company, or a company already
registered as a limited company may re-register under this Act, but
the registration of an unlimited company as a limited company shall
not affect the rights or liabilities of the company in respect of any
debt or obligation incurred, or any contract entered into by, to, with,
or on behalf of the company before the registration, and those rights
or liabilities may be enforced in the manner provided by this Act.
(2) On registration of a company under the provisions of

subsection (1), the Registrar shall close the former registration of the
company, and may dispense with the delivery to him of copies of
any documents, with copies of which he was furnished on the
occasion of the original registration of the company, but, save as
aforesaid, the registration shall take place in the same manner and
shall have effect as if it were the first registration of the company
under this Act.
PROVISIONS WITH RESPECT TO NAMES

OF COMPANIES
19. (1) No company shall be registered by a name which— Restriction on

registration of
companies by
certain names.
(a) is identical with that by which a company in existence is
already registered, or so nearly resembles that name as to be
calculated to deceive, except where the company in
existence is in the course of being dissolved and signifies its
consent in such manner as the Registrar requires ; or
(b) contains the words "Chamber of Commerce", unless the company is a
company which is to be registered under a licence granted under section 21
without the addition of the word "Limited" to its name.
(2) Except with the consent of the Minister, given having regard
to the national interest, no company shall be registered by a name
which contains the words—
10 Companies Aet, No. 17 of 1982
(a) "President", "Presidential" or in the opinion of the Registrar

suggests, or is calculated to suggest, the patronage of the
President or connection with the Government or any
department thereof; or
(b) "Municipal" or "incorporated", or in the opinion of the Registrar

suggests, or is calculated to suggest, connection with any
Municipality or other local authority or with any society or body
incorporated by Act of Parliament; or
(c) "Co-operative" or "Society"; or
(d) "National", "State" or "Sri Lanka" or in the opinion of the

Registrar suggests, or is calculated to suggest, any connection with
the Government or any department thereof.
20. (1) A company may, by special resolution and with the prior Change of name.
approval in writing of the Registrar, change its name.
(2) Where through inadvertence of otherwise, a company on its

first registration or on its registration by a new name is registered by
a name which, in the opinion of the Registrar, is too like the name by
which a company in existence is previously registered, the first-
mentioned company may change its name with the prior sanction of
the Registrar and, if the Registrar so directs within six months from
the date of its being registered by that name, shall change it within a
period of six weeks from the date of the direction or such longer
period as the Registrar may in his discretion allow.
Where a company makes default In complying with a direction
made under the provisions of this subsection, it shall be guilty of an
offence and shall be liable to a fine not exceeding two hundred and
fifty rupees for every day during which the default continues.
(3) Where a company changes its name, the Registrar shall enter
the new name on the register in place of the former name, and shall
issue a certificate of incorporation altered to indicate such change.
(4) The change of name shall not affect any rights or obligations
of the company, or render ineffective any legal proceedings by or
against the company, and any legal proceedings that might have
been continued or commenced against it by the former name may
be continued or commenced against it by its new name.
21. (1) Where it is proved to the satisfaction of the Registrar that

an association whether of recent origin or otherwise about to be
formed as a limited company is to be formed for promoting
commerce, art, science, religion, charity, sport, or any other useful Power to
object, and intends to apply its profits, if any, or other income in dispense with
the word
promoting its objects; and to prohibit the payment of any dividend to
" limited "
its members, the Registrar may by licence direct that the association in name of
may be registered as a company, with limited liability, without the charitable

and
addition of the word "Limited" to its name, and the association may
other
be registered accordingly and shall on registration enjoy all the companies
privileges and (subject to the other provisions of this section) be

subject to all the obligations of a limited company.
(2) Where it is proved to the satisfaction of the Registrar—

(a) that the objects of a company registered under this Act as a
limited company are restricted to those specified in
subsection (1) and to objects incidental or conducive
thereto; and
(b) that by its constitution the company is required to apply its
profits, if any, or other income in promoting its objects and
is prohibited from paying any dividend to its members,
the Registrar may by licence authorize the company to make by
special resolution a change in its name including or consisting of the
omission of the word " Limited " and sub-sections (3) and (4) of
section 20 shall apply to a change of name under this subsection as
they apply to a change of name under that section.
(3) A licence granted under the provisions of this section may be

subject to such terms and conditions as the Registrar thinks fit, for
the association to conform to the requirements of subsection (1), and
such terms and conditions shall be binding on the association to
which such licence is granted, and (where the grant is under the
provisions of subsection (1)) shall, if the Registrar so directs, be
inserted in the memorandum and articles, or in one of those
documents. Any alterations made in the memorandum and articles
shall be so made with prior written approval of the Registrar.
(4) An association to which a licence is granted under the

provisions of this section shall be exempt from the provisions of this
Act relating to the use of the word " Limited " as any part of its
name, and the sending of lists of members to the Registrar.
(5) A licence granted under the provisions of this section may at

any time be revoked by the Registrar where the association to which
such licence is granted fails to comply with the requirements of
subsection (1) or subsection (3), and upon revocation the Registrar
shall enter the word " Limited " at the end of the name upon the
register of the association to which it was granted and the
association shall cease to enjoy the exemptions and privileges
granted by the provisions of this section:
Provided that, before a licence is so revoked, the Registrar shall

give the association notice in writing of his intention, and shall
afford the association an opportunity of being heard in opposition to
the revocation.
(6) Where an association in respect of which a licence under this
section is in force alters the provisions of its memorandum with
respect to its objects the Registrar may, unless he sees fit to revoke
the licence vary, add to or alter the terms and conditions subject to
which such licence was granted.
(7) Where a licence granted under the provisions of this section to

an association the name of which contains the words " Chamber of
Commerce " or any other name signifying an association of business
interests is revoked, the association shall, within a period of six
weeks from the date
of revocation or such longer period as the Registrar may in his

discretion allow, change its name to a name which does not contain
such words or such name, and—
(a) the notice to be given under the provisions of the proviso to
subsection (5) to that association shall include a statement in
accordance with the preceding provisions of this subsection; and
(b) the provisions of subsections (3) and (4) of section 20 shall apply
to a change of name under this subsection as they apply to a change
of name under that section.
Where an association makes default in complying with the
requirements of this subsection, it shall be guilty or an offence and
shall be liable to a fine not exceeding two hundred and fifty rupees
for every day during which the default continues.
GENERAL PROVISIONS WITH RESPECT TO

MEMORANDUM AND ARTICLES
22. (1) Subject to the provisions of this Act the memorandum and Effect of
memorandum
articles shall, when registered, bind the company and the members and articles.
thereof to the extent as if they respectively had been signed and

sealed by each member, and contained covenants on the part of each
member to observe all the provisions of the memorandum and of the
articles.
(2) All money payable by any member to the company under the memorandum
or articles shall be a debt due from him to the company.
23. (1) In the case of a company limited by guarantee and not Provision as to
memorandum
and
having a share capital, and registered on or after the appointed date, articles
of companies
every provision in the memorandum or articles or in any resolution limited by
guarantee.
of the company purporting to give any person a right to participate in
the divisible profits of the company otherwise than as a member
shall be void.
(2) For the purposes of the provisions of this Act relating to the
memorandum of a company limited by guarantee, and this section,
every provision in the memorandum or articles, or in any resolution,
of a company limited by guarantee and registered on or after the
appointed date, purporting to divide the undertaking of the company
into shares or interests shall be treated as a provision for a share

capital, notwithstanding that the nominal amount or number of the
shares or interests may not be specified thereby.
Alteration in
memorandum or
articles increasing
24. Notwithstanding anything in the memorandum or articles of liability to
contribute to
a company, no member of the company shall be bound by an share capital not
to bind existing
alteration made in the memorandum or articles after the date on members
without consent.
which he became a member, if and in so far as the alteration requires
him to take or subscribe for more shares than the number held by
him at the date on which the alteration is made, or in any way
increases his liability as at that date to contribute to the share capital
of, or otherwise to pay money to, the company:
Provided that the provisions of this section shall not apply in any Power to alter
conditions in
memorandum
case where the member agrees in writing, either before or after the which could have
been contained
alteration is made, to be bound thereby. in articles.
25. (1) Subject to the provisions of section 24 and section 217,

any condition contained in a company's memorandum which could
lawfully have been contained in its articles may, subject to the
provisions of this section, be altered by the company by special
resolution:
Provided that where an application has been made to court for the
alteration to be cancelled the alteration shall not have effect except
in so far as it is confirmed by the court.
(2) The provisions of subsection (1) shall not apply where the
memorandum itself prohibits, or provides for, the alteration of all or
any of the said conditions and shall not authorize the variation or
abrogation of the special rights of any class of members.
(3) The provisions of subsections (2), (3), (4), (7) and (8) of
section 7 (except paragraph (b) of subsection (2)) shall apply in
relation to any alteration and to any application made under this
section as they apply in relation to an alteration and application
made under that section.
(4) The provisions of this section shall apply to a company's

memorandum whether registered before or after the appointed date.
26. (1) A company shall, on a written request made by any Copies of

memorandum,
member, send such member within seven days of the date of receipt articles and
of such request and subject to the payment of a fee of twenty-five agreements to be
given to members.
rupees or such less sum as the company may specify, a copy of—
(a) the memorandum;
(b) the articles, if any; and
(c) the agreement, if any, entered into or proposed to be entered
into by the company with any person appointed or to be
appointed as its agent, secretary or manager.
(2) Where a company makes default in complying with any

request made under the provisions of subsection (1), the company
and every officer of the company who is in default shall be guilty of
Issued copies of
an offence and shall be liable to a fine not exceeding two hundred memorandum to
embody
and fifty rupees.
alterations.
27. (1) Where an alteration is made in the memorandum of a

company, every copy of the memorandum issued after the date of
the alteration shall be in accordance with the alteration.
(2) Where after the date of any such alteration, the company
issues any copy of the memorandum which is not in accordance with
the alteration, the company and every officer of the company who is
in default shall be guilty of an offence and shall be liable to a fine
not exceeding two hundred and fifty rupees for each copy so issued,
an offence and shall be liable to a like penalty.
MEMBERSHIP OF COMPANY
Definition of
members.
Membership of
holding
company.
28. (1) The subscribers to the memorandum of a company shall be
deemed to have agreed to become members of the company, and on
its registration shall be entered as members in its register of
members.
(2) Every other person who agrees to become a member of a

company, and whose name is entered in its register of members,
shall be a member of the company.
29. (1) Except in the cases hereafter in this section set out, a body
corporate cannot be a member of a company which is its holding
company, and any allotment or transfer of shares in a company to its
subsidiary shall be void.
16 Companies Act, NO. 17 of 1982
(2) The provisions of this section shall not apply where the
subsidiary is concerned as legal representative, or where it is
concerned as trustee, unless the holding company or a subsidiary
thereof is beneficially interested under the trust and is not so
interested only by way of security for the purposes of a transaction
entered into by it in the ordinary course of a business which includes
the lending of money.
(3) The provisions of this section shall not prevent a subsidiary

which is, on the appointed date, a member of its holding company,
from continuing to be such member but, subject to the provisions of
subsection (2), the subsidiary shall have no right to vote at meetings of
the holding company or any class of members thereof.
(4) Subject to the provisions of subsection (2), the provisions of

subsections (1) and (3) shall apply in relation to a nominee for a body
corporate which is a subsidiary as if any reference in subsections (1)
and (3) to a body corporate included a reference to a nominee for a
body corporate.
(5) Any reference in this section to shares, in relation to a company

limited by guarantee or unlimited which is a holding company Meaning of
whether or not it has a share capital, shall be construed as including a "private company".
reference to the interest of its members as such, whatever the form of

the interest.
30. (1) For the purposes of this Act the expression "private
company" means a company which by its articles—
(a) restricts the right to transfer its shares; and
(b) limits the number of its members to fifty, not including persons
who are in the employment of the company and persons who, having
been formerly in the employment of the company, were whilst in that
employment, and have continued after the determination of that
employment to be, members of that company ; and
(c) prohibits any invitation to the public to subscribe for any shares
or debentures of the company.
(2) Where two or more persons hold one or more shares in a

company jointly, they shall, for the purposes of this section, be
treated as a single member.
Consequences of default
31. Where the articles of a company include the provisions set out in complying with
conditions constituting a
in section 30 in order to constitute it a private company but default is company a private
company.
made in complying with any of those provisions, the company shall
cease to be entitled to the privileges and exemptions conferred on
private companies under the provisions contained in section 33,
paragraph (d) of section 255 and sub-paragraph (i) of paragraph (a)
of the proviso to subsection (1) of section 257 and thereupon the
provisions contained in section 33, paragraph (d) of section 255 and
sub-paragraph (i) of paragraph (a) of the proviso to subsection (1) of
section 257 shall apply to the company as if it were not a private
company:
Provided that the court, on being satisfied that the failure to comply
with the conditions was accidental or due to inadvertence or to some
other sufficient cause, or that on other grounds it is just and
equitable to grant relief, may, on the application of the company or
any other person interested and on such conditions as seem to the
court just and expedient, order that the company be relieved from
such consequences as aforesaid.
32. (1) Where a company, being a private company alters its Statement in lieu of
prospectus to be delivered
to Registrar by company on
articles in such manner that they no longer include the provisions ceasing to be private
company.
which, under the provisions of section 30, are required to be
included in the articles of a company in order to constitute it a
private company, the company shall, as on the date of the alteration,
cease to be a private company and shall within a period of fourteen
days from such date, deliver to the Registrar for registration, a
statement in lieu of prospectus in the form and containing the
particulars set out in Part I of the Second Schedule hereto, and in the
instances specified in Part II of that Schedule, setting out the reports
specified therein. The provisions contained in Parts I and II, shall
have effect subject to the provisions contained in Part III, of that
Schedule:
Provided that a statement in lieu of prospectus need not be

delivered under the provisions of this subsection if within the said
period of fourteen days a prospectus relating to the company which
complies with the provisions contained in the Third Schedule hereto
is issued and is delivered to the Registrar as required by the
provisions of section 43.
4—A 63752 (82/06)
(2) Every statement in lieu of prospectus delivered under the

provisions of subsection (1) shall, where the persons making any
such reports as aforesaid have made therein or have, without giving
the reasons, indicated therein any such adjustments as are
mentioned in paragraph 5 of the Second Schedule hereto, have
endorsed thereon or attached thereto a written statement signed by
those persons setting out the adjustments and giving the reasons
therefor.
(3) Where default is made in complying with the provisions of

subsection (1) or subsection (2), the company and every officer of
the company who is in default shall be guilty of an offence and
shall be liable to a fine of five hundred rupees.
(4) Where a statement in lieu of prospectus delivered to the

Registrar under the provisions of subsection (1) includes any untrue
statement, any person who authorised the delivery of the statement
in lieu of prospectus for registration shall be guilty of an offence
and shall be liable to a fine not exceeding five thousand rupees or
to imprisonment of either description for a term not exceeding two
years or to both such fine and imprisonment, unless he proves
either that the untrue statement was immaterial or that he had
reasonable ground to believe and did up to the time of the delivery
for registration of the statement in lieu of prospectus believe that
the untrue statement was true.
(5) For the purposes of. this section—

(a) a statement included in a statement in lieu of prospectus shall
be deemed to be untrue if it is misleading in the form and context
in which it is included; and
(b) a statement shall be deemed to be included in a statement in
lieu of prospectus if it is contained therein or in any report or
memorandum appearing on the face thereof or by reference
incorporated therein.
REDUCTION OF NUMBER OF MEMBERS BELOW LEGAL

MINIMUM
33. Where at any time the number of members of a company is reduced, in Prohibition of
the case of a private company, below two, or, in the case of a public company, carrying on
business with
below seven, or in the case of a people's company, below fifty, and such fewer than
company carries on business for more than six months while the number is so seven or, in the
case of a
reduced, every person who is a member of the company during the time that it private company
so carries on business after those six months and is cognizant of the fact that it is two, or in the
case of a people's
carrying on business with fewer than two members, seven members or fifty company fifty,
members, as the case may be, shall be severally liable for the payment of the members.
whole debts of the company contracted during that time, and may be sued
severally therefor.
CONTRACTS, &C.
34. (1) Contracts on behalf of a company may be made as Form of contracts.
follows :—
(a) a contract which if made between private persons would be by

law required to be in writing, may be made on behalf of the
company in writing under the common seal of the company;
(b) a contract which if made between private persons would be by
law required to be in writing, signed by the parties to be
charged therewith, may be made on behalf of the company in
writing signed by any person acting under its authority,
express or implied;
(c) a contract which if made between private persons would in law
be valid although made by parol only, and not reduced into
writing, may be made by parol on behalf of the company by
any person acting under its authority, express or implied.
Bills of
exchange
and
promissory
notes.
(2) A contract made in accordance with the provisions of this
section shall be effectual in law, and shall bind the company and
its successors and all other parties thereto.
(3) A contract made in accordance with the provisions of this

section may be varied or discharged in the same manner in which it
is authorized by this section to be made.
35. A bill of exchange or promissory note shall be deemed to

have been made, accepted, or endorsed on behalf a company, if
made, accepted, or endorsed in the name of, or by or on behalf or
on account of, the company by any person acting under its written
authority.
20. Companies Act, No.17 of 1982
36. (1) A company, may, by writing under its common seal, Execution of
deeds abroad.
empower any person, whether generally or in respect of any specified
matters, to act as its attorney to execute deeds on its behalf in any
place outside Sri Lanka.
(2) A deed signed by such an attorney on behalf of the company

and under his seal shall bind the company and have the same effect as
if it were under its common seal.
Power for company to

37. (1) A company whose objects require or comprise the have official seal for
use abroad.
transaction of business in foreign countries may, if authorized by its
articles, have for use in any territory, district, or place outside Sri
Lanka, an official seal which shall be a facsimile of the common seal
of the company, with the addition on its face of the name of every
such territory, district, or place, as the case may be, in which it is to be
used.
(2) A deed or other document to which an official seal is duly

affixed shall bind the company as if it had been sealed with the
common seal of the company.
(3) A company having an official seal for use in any such territory,
district or place may, by writing under its common seal, authorize any
person appointed for the purpose in that territory, district or place, to
affix the official seal to any deed or other document to which the
company is party in that territory, district or place.
(4) The authority of any such agent shall, as between the company
and any person dealing with the agent, continue during that period, if
any, specified in the instrument conferring such authority, or if no
period is so specified, until notice of the revocation or determination
of the agent’s authority has been given to the person dealing with such
agent.
(5) The persons affixing any such official seal shall, by writing
under his hand, certify on the deed or other instrument to which the
seal is affixed, the date on which and the place at which it is affixed.
AUTHENTICATION OF DOCUMENTS AND TRANSLATION
Authentication of
38. (1) A document or record of proceedings requiring documents
and translation.
authentication by a company shall be signed by a director, secretary,
or other authorized officer of the company, and may not be under its
common seal.
(2) Where any document required by this Part to be delivered to

the Registrar is in a language other than the official language, the
Registrar may, in any instance he considers necessary, request in
writing, the delivery of a printed translation thereof in such language
as may be decided by the Registrar, certified in the prescribed
manner to be a correct translation :
Provided that, where such a request has not been complied with,
the Registrar shall take no further action on such document.
PART II
SHARE CAPITAL AND DEBENTURES
PROSPECTUS
39. A prospectus issued by or on behalf of a company or in Dating of
prospectus
relation to a company intended to be formed shall bear a date, and
such date shall, unless the contrary is proved, be taken as the date of
publication of such prospectus.
40. (1) Every prospectus issued by or on behalf of a company, or Specific requirements

as to
by or on behalf of any person who is or has been engaged or particulars
in prospectus
interested, in the formation of the company, shall state the matters
specified in Part I of the Third Schedule hereto and set out the
reports specified in Part II of that Schedule. The provisions
contained in Parts I and II, shall have effect subject to the provisions
contained in Part III, of that Schedule.
(2) A condition requiring or binding an applicant for shares in, or

debentures of, a company, to waive compliance with any
requirement of this section, or purporting to affect him with notice of
any contract, document, or matter not specifically referred to in the
prospectus, shall be void.
(3) It shall not be lawful to issue any form of application for

shares in, or debentures of, a company, unless the form is issued
with a prospectus which complies with the requirements of this
section:
Provided that the preceding provisions of this subsection shall not

apply where it is shown that the form of application was issued
either—
(a) in connection with a bona fide invitation to a person to enter

into an under-writing agreement with respect to the shares or
debentures; or
(b) in relation to shares or debentures which were not offerred to the public.
Any person acting in contravention of the provisions of this subsection, shall be

guiltyof an offence and shall be liable to a fine not exceeding five thousand rupees.
(4) In the event of non-compliance with or contravention of any of the

requirements of this section, a director or other person responsible for the issue of
the prospectus shall not incur any liability by reason of such non-compliance or
contravention, if )
(a) as regards any matter not disclosed, he proves that he was not
cognizant thereof ; or
(b) he proves that the non-compliance or contravention arose from an
honest mistake of fact on his part ; or
(c) the non-compliance or contravention was in respect of matters which in
the opinion of the court dealing with the case were immaterial or was
otherwise such as ought, in the opinion of that court, having regard to
all the circumstances of the case, reasonably to be excused.
Provided that, in the event of failure to include in a prospectus a statement with

respect to the matters specified in paragraph 17 of the Third Schedule hereto, no
director or other person shall incur any liability in respect of the failure unless it be
proved that he had knowledge of the matters not disclosed.
(5) The provisions of this section shall not apply to the issue to existing
members or debenture holders of a company of a prospectus or form of application
relating to shares in or debentures of the company, whether an applicant for shares or
debentures shall or shall not have the right to renounce in favour of other persons,
but save as aforesaid, the provisions of this section shall apply to a prospectus or a
form of application whether issued on or with reference to the formation of a
company or subsequently.
(6) Nothing in this section shall limit or diminish any liability which any person
may incur under any written or other law or this Act other than this section.
(7) In any case where a prospectus has been sent for registration
in accordance with the provisions of section 43 and has been
registered by the Registrar, nothing in the preceding provisions of
this section shall be deemed or construed to prohibit the issue or
publication of any notice, circular or advertisement stating that the
prospectus has been registered and issued and that copies thereof are
available on application, if such notice, circular or advertisement
does not contain any invitation to the public to subscribe for or
Expert's
purchase any shares in or debentures of a company. consent to
issue of
prospectus
containing
statement by
41. (1) A prospectus inviting persons to subscribe for shares in, or him.
debentures of, a company and including a statement purporting to be

made by an expert shall not be issued unless—
(a) such expert has given and has not, before delivery of a copy of
the prospectus for registration, withdrawn his written
consent to the issue thereof with the statement included in
the form and context in which it is included; and
(b) a statement that such expert has given and has not withdrawn
his consent as referred to in paragraph (a), appears in the
prospectus.
(2) Where any prospectus is issued in contravention of the

provisions of this section, the company and every person who is
Consent of
knowingly a party to the issue thereof shall be guilty of an offence
bank or
and shall be liable to a fine not exceeding five thousand rupees. attorney-at-law
or auditor
necessary for
(3) In this section, the expression "expert" includes an engineer, inclusion of name
in prospectus
a valuer, auditor, an accountant and any other person whose
profession gives authority to a statement made by him.
42. (1) No bank shall be named as a company’s bankers in any
prospectus inviting persons to subscribe for shares in, or debentures
of, the company unless that bank has given and has not, before
delivery of a copy of the prospectus for registration, withdrawn its
written consent to the inclusion in such prospectus of its names as
such bankers :
Provided that a bank shall not be deemed for the purposes of this
Act to have authorized the issue of a prospectus by reason only of its
having given the consent required by the preceding provisions of this
subsection to the inclusion in such prospectus of its name as the
company's bankers.
(2) No attorney-at-law shall be named as a company's lawyer in

a prospectus inviting persons to subscribe for shares in, or
debentures of, the company unless that attorney-at-law has given and
has not, before delivery of a copy of the prospectus for registration,
withdrawn his written consent to the inclusion in such prospectus of
his name as such lawyer :
Provided that an attorney-at-law shall not be deemed for the

purposes of this Act to have authorized the issue of a prospectus by
reason only of his having given the consent required by the
preceding provisions of this subsection to the inclusion in such
prospectus of his name as the company's lawyer.
(3) No auditor shall be named as a company's auditor in a

prospectus inviting persons to subscribe for shares in, or debentures
of, the company unless that auditor has given and has not, before
delivery of a copy of the prospectus for registration, withdrawn his
written consent to the inclusion therein of his name as such auditor :
Provided that an auditor shall not be deemed for the purposes of

this Act to have authorized the issue of a prospectus by reason only
of his having given the consent required by the preceding provisions
of this subsection to the inclusion in such prospectus of his name as
the company's auditor.
(4) Where the name of any bank, attorney-at-law or auditor is

included in any prospectus of a company in contravention of the
provisions of this section, the company and every person who is
knowingly a party to the issue thereof shall be guilty of an offence
and shall be liable to a fine not exceeding five thousand rupees.
Registration
43. (1) No prospectus shall be issued by or on behalf of a of prospectus.
company, or in relation to an intended company unless, on or before

the date of its publication, there has been delivered to the Registrar
for registration a copy of such prospectus signed by every person
who is named in such prospectus as a director or proposed director
of the company, or by his agent authorized in writing, and having
endorsed thereon or attached thereto—
(a) any consent to the issue of the prospectus required by section
41 from any person as an expert ;
(b) a declaration made and subscribed by every person who is

named in such prospectus as a director or a proposed director of
the company to the effect that he has read the provisions of this
Act relating to the issue of a prospectus and that those provisions
have been complied with; and
(c)in the case of a prospectus issued generally where the persons

making any report required by Part II of the Third Schedule
hereto have made, or have, without giving the reasons, indicated
in such prospectus any such adjustments as are mentioned in
paragraph 30 of such Schedule, a written statement signed by
such persons setting out the adjustments and giving the reasons
therefor.
(2) Every prospectus shall, on the face of it—

(a) state that a copy has been delivered for registration as required
by this section ; and
(b) set out, or refer to, statements included in the prospectus which
specify any documents required by this section to be
endorsed on or attached to the copy so delivered.
(3) The Registrar shall not register a prospectus—

(a) unless the copy thereof is signed in the manner required by this
section; and
(b) unless it has endorsed thereon or attached thereto the
documents (if any) specified as aforesaid; and
(c) unless it bears the date of the delivery of the copy thereof to the
Registrar under this section or it bears a future date to be
inserted in such prospectus under the provisions of section
39; and
(d) where is bears a future date as hereinbefore provided, unless
that date has been confirmed or altered by notice served on
the Registrar.
(4) Where a prospectus is issued without a copy thereof being

delivered under this section to the Registrar, or without the copy so
delivered having endorsed thereon or attached thereto the required
documents referred to in subsection (1), the company and every
person who is knowingly a party to the issue of the prospectus, shall
be guilty of an offence and shall be liable to a fine not exceeding two
hundred and fifty rupees for every day from the date of
the issue of the prospectus until a copy thereof is so delivered with the required
documents endorsed thereon or attached thereto.
44. (1) A company limited by shares or a company limited by

Restrictions on
guarantee and having a share capital, shall not, prior to the statutory alteration of terms
mentioned in
meeting of such company, vary the terms of a contract referred to in prospectus or
statement in lieu of
the prospectus, or statement in lieu of prospectus except subject to prospectus.
the approval of the statutory meeting.
(2) The provisions of this section shall not apply to a private

Civil liability
company. for
mis-statements
in prospectus.
45. (1) Subject to the provisions of this section, where a prospectus
invites persons to subscribe for shares in or debentures of a
company, the following persons shall be liable to pay compensation
to all persons who subscribe for any shares or debentures on the
faith, of the prospectus for the loss or damage they may have
sustained by reason of any untrue statement, included in such
prospectus, that is to say—
(a) every person who is a director of the company at the time of
the issue of the prospectus;
(b) every person who has authorized himself to be named and is named in the
prospectus as a director or as having agreed to become a director either
immediately or after an interval of time;
(e) every person being a promoter of the company ; and
(d) every person who has authorized the issue of the prospectus;
Provided that, where under the provisions of section 41, the

consent of any person is required to the issue of a prospectus and
such person has given such consent, such person shall not by reason
of his having given such consent be liable under the provisions of
this subsection as a person who has authorized the issue of the
prospectus except in respect of an untrue statement purporting to be
made by him as an expert.
(2) No person shall be liable under the provisions of subsection

(1) if he proves—
(a) that, having consented to become a director of the company,

he withdrew his consent before the issue of the prospectus,
and that it was issued without his authority or consent; or
27 Companies, Act, No. 17 of 1982
(b) that the prospectus was issued without his knowledge or consent
and that on becoming aware of its issue he forthwith gave
reasonable public notice that it was issued without his
knowledge or consent; or
(c) that, after the issue of the prospectus and before allotment
thereunder, he, on becoming aware of any untrue statement in
such prospectus, withdrew his consent thereto and gave
reasonable public notice of the withdrawal and of the reasons
therefor; or
(d) that─
(i) as regards every untrue statement not purporting to be made on
the authority of an expert or of a public official document or
statement, he had reasonable ground to believe, and did, up
to the time of the allotment of the shares or debentures, as the
case may be, believe, that the statement was true ; and
(ii) as regards every untrue statement purporting to be a statement by

an expert or contained in what purports to be a copy of or
extract from a report or valuation of an expert, it fairly
represented the statement, or was a correct and fair copy of
or extract from the report or valuation, as the case may be,
and he had reasonable ground to believe and did up to the
time of the issue of the prospectus believe that the person
making the statement was competent to make it and that
person had given the consent required by the provisions of
section 41 to the issue of the prospectus and had not
withdrawn that consent before delivery of a copy of the
prospectus for registration or to the defendant's knowledge,
before allotment thereunder ; and
(iii) as regards every untrue statement purporting, to be a statement

made by a person in his official capacity or contained in what
purports to be a copy of or extract from a public document
issued officially. It was a correct and fair representation of
the statement or copy or extract from the document :
Provided that the provisions of this subsection shall not apply in

the case of a person liable, by reason of his having given the consent
required by the provisions of section 41, as a person who has
authorized the issue of the prospectus in respect of an untrue
statement purporting to be made by him as an expert.
(3) A person who, apart from the provisions of this subsection,

would under the provisions of subsection (1) be liable, by reason of
his having given the consent required by the provisions of section
41 as a person who has authorized the issue of a prospectus in
respect of an untrue statement purporting to be made by him as an
expert, shall not be so liable if he proves—
(a) that, having given his consent under the provisions of section
41 to the issue of the prospectus, he withdrew it in
writing before delivery of a copy of the prospectus for
registration; or
(b) that, after delivery of a copy of the prospectus for registration
and before allotment thereunder, he, on becoming aware
of the untrue statement, withdrew his consent in writing
and gave reasonable public notice of the withdrawal, and
of the reason therefor ; or
(c) that he was competent to make the statement and that he had
reasonable ground to believe and did up to the time of the
allotment of the shares or debentures, as the case may be,
believe that the statement was true.
(4) Where—
(a) the prospectus contains the name of a person as a director
of the company, or as having agreed to become a
director of such company, and he has not consented to
become a director or has withdrawn his consent before
the issue of the prospectus, and has not authorized or
consented to the issue of such prospectus ; or
(b) the consent of a person is required under the provisions

of section 41 to the issue of the prospectus and he either
has not given that consent or has withdrawn it before
the issue of the prospectus,
the directors of the company, except any director without whose
knowledge or consent the prospectus was issued, and any other
person who authorised the issue of such prospectus, shall be liable to
indemnify the person named under
paragraph (a), or whose consent was required under paragraph (b),

as the case may be, against all damages, costs and expenses to which
he may be made liable by reason of his name having been inserted in
the prospectus or of the inclusion therein of a statement purporting
to be made by him as an expert, as the case may be, or in defending
himself against any action or legal proceeding brought against him
in respect thereof:
Provided that a person shall not be deemed for the purposes of this
subsection to have authorized the issue of a prospectus by reason
only of his having given the consent required by the provisions of
section 41 to the inclusion in such prospectus of a statement
purporting to be made by him as an expert.
(5) Every person who, by reason of his being a director or being

named as a director or as having agreed to become a director, or of
his having authorized the issue of the prospectus, or of the inclusion
in such prospectus of a statement purporting to be made by him as
an expert, becomes liable to make any payment under this section
may recover contribution, as in cases of contract, from any other
person who, if sued separately, would have been liable to make the
same payment unless the person who has become so liable was, and
that other person was not, guilty of fraudulent misrepresentation.
(6) For the purposes of this section—

(a) the expression " promoter" means a promoter who was a
party to the preparation of the prospectus, or of the
portion thereof containing the untrue statement, but does
not include any person by reason of his acting in a
professional capacity for persons engaged in procuring
the formation of the company ; and
(b) the expression "expert" has the same meaning as in section
41.
46. (1) Where a prospectus issued on or after the appointed date Criminal liability
for
includes any untrue statement, any person who authorized the issue mis-statements
of the prospectus shall be guilty of an offence and shall be liable to a in prospectus.
fine not exceeding five thousand rupees or to imprisonment of either

description for a term not exceeding two years or to both such fine
and imprisonment unless he proves either that the
statement was immaterial or that he had reasonable ground to

believe and did, up to the time of the issue of the prospectus, believe
that the statement was true.
(2) A person shall not be deemed for the purposes of this section
to have authorized the issue of a prospectus by reason only of his
having given the consent required by the provisions of section 41 to
the inclusion in such prospectus of a statement purporting to be
made by him as an expert.
(3) No prosecution shall be instituted in respect of any offence under the

provisions of subsection (1) except with the sanction of the Attorney-General.
47. (1) Where a company allots or agrees to allot any shares in or Document
containing
debentures of the company with a view to all or any of those shares offer of shares
or
debentures
or debentures being offered for sale to the public, any document by for sale
to be
which the offer for sale to the public is made shall for all purposes deemed
prospectus
be deemed to be a prospectus issued by the company, and any
written law as to the contents of prospectuses, and to liability in
respect of statements in and omission from prospectuses, or other-
wise relating to prospectuses, shall apply and have effect
accordingly, as if the shares or debentures had been offered to the
public for subscription and as if persons accepting the offer in
respect of any shares or debentures were subscribers for those shares
or debentures, but without prejudice to the liability, if any, of the
persons by whom the offer is made, in respect of mis-statements
contained in the document or otherwise in respect thereof.
(2) For the purposes of this Act, it shall, unless the contrary is
proved, be evidence that an allotment of, or an agreement to allot,
shares or debentures was made with a view to the shares or
debentures being offered for sale to the public if it is shown—
(a) that an offer of the shares or debentures or of any of them for sale to the public
was made within six months after the allotment or agreement to allot;
or
(b) that at the date when the offer was made the whole consideration
to be received by the company in respect of the shares or
debentures had not been so received.
(3) The provisions of section 43 as applied by this section shall

have effect as though the persons making the offer were persons
named in a prospectus as directors of a company, and the provisions
of section 40 as applied by this section shall have effect as if it
required a prospectus to state in addition to the matters required by
that section to be stated in a prospectus—
(a) the net amount of the consideration received by the company
in respect of the shares or debentures to which the offer
relates; and
(b) the place and time at which the contract under which the said
shares or debentures have been or are to be allotted may be
inspected.
(4) Where a person making an offer to which this section relates is a Interpretation of
provisions
company or a firm, it shall be sufficient if the document aforesaid is relating to
signed on behalf of the company or firm by two directors of the prospectuses.
company or not less than half of the partners, as the case may be,
and any such director or partner may sign by his agent authorized in
writing.
48. For the purposes of the preceding provisions of this Part—

(a) a statement included in a prospectus shall be deemed to be
untrue if it is misleading in the form and context in which it
is included; and
(b) a statement shall be deemed to be included in a prospectus if it
is contained in, or in any report or memorandum appearing
on the face of, or by reference incorporated in, or issued
with, such prospectus.
ALLOTMENT
19. (1) No allotment shall be made of any share capital of a
company offered to the public for subscription unless the amount
stated in the prospectus as the minimum amount which in the Prohibition of
allotment unless
opinion of the directors, must be raised by the issue of share capital
minimum
in order to provide for the matters specified in paragraph 5 of the subscription
received.
Third Schedule hereto has been subscribed, and the sum payable on
application for the amount so, stated has been paid to and received
by the company.
For the purposes of this subsection, a sum shall be deemed to

have been paid to and received by the company if a cheque for that
sum has been received in good faith by the company and the
directors of the company have no reason for suspecting that the
cheque may not be paid.
(2) The amount so stated in the prospectus shall be reckoned exclusively of any
amount payable otherwise than in cash and is in this Act referred to as " the
minimum subscription ".
(3) The amount payable on application on each share shall not be

less than five per centum of the nominal amount of the share.
(4) Where the conditions set out in the preceding subsections have
not been complied with, within the expiration of sixty days from the
date of closing of the subscription lists, any money received from
applicants for shares shall be forthwith repaid to them without
interest, and if such money is not so repaid within seventy-five days
from the date of closing of the subscription lists, the directors of the
company shall be jointly and severally liable to repay that money
with interest at the legal rate, from the expiration of the seventy-fifth
day :
Provided that a director shall not be liable if he proves that the
default in the repayment of the money was not due to any
misconduct or negligence on his part.
(5) Any condition requiring or binding any applicant for shares

to waive compliance with any requirement of this section shall be
void.
(6) The provisions of this section other than the provisions of
subsection (3) shall not apply to any allotment of shares subsequent
to the first allotment of shares offered to the public for subscription.
Prohibition of
50. (1) A company having a share capital which does not issue a
allotment in
prospectus on or with reference to its formation or which has issued certain cases
unless statement
such a prospectus but has not proceeded to allot any of the shares
in lieu of
offered to the public for subscription, shall not allot any of its shares prospectus
delivered to
or debentures unless at least three days before the first allotment of
Registrar.
either shares or debentures there has been delivered to the Registrar
for registration a statement in lieu of prospectus, signed by every
person who is named in such prospectus as a director
or a proposed director of the company or by his agent authorized in
writing, in the form and containing the particulars set out in Part I of
the Fourth Schedule hereto, setting out the reports specified in such
Schedule. The provisions contained in Parts I and II, shall have
effect subject to the provisions contained in Part III, of that
Schedule.
(2) Every statement in lieu of prospectus delivered under the

provisions of subsection (1) shall, where the persons making any
such report under that subsection have made therein or have, without
giving the reasons, indicated therein any such adjustments as are
mentioned in paragraph 5 of the Fourth Schedule hereto, have
endorsed thereon or attached thereto a written statement signed by
those persons setting out the adjustments and giving the reasons
therefor.
(3) The provisions of this section shall not apply to a private

company.
(4) Where a company acts in contravention of the provisions of

subsection (1) or subsection (2) the company and every director of
the company who knowingly and wilfully authorizes or permits the
contravention shall be guilty of an offence and shall be liable to a
fine not exceeding one thousand rupees.
(5) Where a statement in lieu of prospectus delivered to the

Registrar under the provisions of subsection (1) includes any untrue
statement, any person who authorized the delivery of the statement
in lieu of prospectus for registration shall be guilty of an offence and
shall be liable to a fine not exceeding five thousand rupees, or to
imprisonment of either description for a term not exceeding two
years or to both such fine and imprisonment, unless he proves either
that the untrue statement was immaterial or that he had reasonable
ground to believe and did up to the time of the delivery for
registration of the statement in lieu of prospectus believe that the
untrue statement was true.

(a) a statement included in a statement in lieu of prospectus shall
be deemed to be untrue if it is misleading in the form and
context in which it is included; and
(b) a statement shall be deemed to be included in a statement in
lieu of prospectus if it is contained in such prospectus in, any
report or memorandum appearing on the face of, or by
reference incorporated in, such prospectus.
6—A 63752 (82/05)
Effect of irregular
51. (1) An allotment made by a company to an applicant in allotment.
contravention of the provisions of section 49 or section 50 shall be

voidable at the instance of the applicant within one month from the
date of the holding of the statutory meeting of the company, or, in
any case where the company is not required to hold a statutory
meeting, or where the allotment is made after the holding of the
statutory meeting, within one month from the date of the allotment,
and shall be so voidable notwithstanding that the company is in the
course of being wound up.
(2) Where any director of a company knowingly contravenes or

permits or authorizes the contravention of any of the provisions of
section 49 or section 50, he shall be liable to compensate the
company and the allottee respectively for any loss, damages, or costs
which the company or the allottee may have sustained or incurred
thereby :
Applications for,
and allotment of,
shares and
Provided that no proceedings to recover any such loss, damages, debentures.
or costs shall be commenced after the expiration of two years from

the date of the allotment.
52. (1) No allotment shall be made of any shares in, or debentures

of, a company in pursuance of a prospectus issued generally and no
proceedings shall be taken on applications made in pursuance of a
prospectus so issued, until the commencement of the third day after
that on which the prospectus is first so issued or such later time (if
any) as may be specified in the prospectus. The commencement of
such third day or such later time as aforesaid is hereafter in this Act
referred to as " the time of the opening of the subscription lists".
(2) The reference in subsection (1) to the day on which the
prospectus is first issued generally shall be construed as referring to
the day on which it is first so issued as a newspaper advertisement:
Provided that, if it is not so issued as a newspaper advertisement

before the third day after that on which it is first so issued in any
other manner, the said reference shall be construed as referring to the
day on which it is first so issued in such manner.
(3) The validity of an allotment shall not be affected by any

contravention of the preceding provisions of this section but, in the
event of any such contravention, the company,
35 Companies Act, No. I7 of l982

an offence and shall be liable to a fine not exceeding five thousand
rupees.
(4) In the application of this section to a prospectus offering shares

or debentures for sale, the preceding subsections shall have effect
with the substitution for a reference to allotment, of a reference to
sale, and for the reference to the company and every officer of the
company who is in default, of a reference to any person by or
through whom the offer is made and who knowingly and wilfully
authorizes or permits the contravention.
(5) An application for shares in or debentures of a company

which is made in pursuance, of a prospectus issued generally shall
not be revocable until after the expiration of the third day from the
date of the opening of the subscription lists, or the giving before the
expiration of the said third day, by some person responsible under
the provisions of section 45 for the prospectus, of a public notice
having the effect under that section of excluding or limiting the
responsibility of the person giving it.
(6) In reckoning for the purposes of this section the third day
after any day, any intervening day which is a bank holiday or public
holiday in Sri Lanka shall be disregarded, and if the third day (as so
reckoned) is itself such a bank or public holiday there shall for the
said purposes be substituted the first day thereafter which is none of
them.
53. (1) Whenever a company limited by shares or a company Return as to
allotments
limited by guarantee and having a share capital makes any allotment
of its shares, the company shall within one month from the date of
such allotment deliver to the Registrar for registration—
(a) a return of the allotments stating—
(i) the number and nominal amount of the shares
comprised in the allotment,
(ii) the name of each allottee,
(iii) the place at which each allottee ordinarily
resides.
(iv) the place to which any communication intended for each

allottee may be sent,
(v) a description of each allottee, and
(vi) the amount, if any, paid or due and payable on each share; and
(b) in the case of shares allotted as fully or partly paid up otherwise

than in cash, a contract in writing constituting the title of the
allottee to the allotment together with any contract of sale, or
for services or other consideration in respect of which that
allotment was made, such contracts being duly stamped, and
a return stating the number and nominal amount of shares so
allotted, the extent to which they are to be treated as paid up,
and the consideration for which they have been allotted.
(2) Where a contract referred to in subsection (1) is not reduced

to writing, the company shall, within one month from the date of
allotment, deliver to the Registrar for registration the prescribed
particulars of the contract stamped with the same stamp duty as
would have been payable if the contract had been reduced to writing,
and such particulars shall be deemed to be an instrument within the
meaning of the Stamp Ordinance and the Registrar may, as a
condition of filing the particulars, require that the duty payable
thereon be determined in accordance with the provisions of Chapter
III of that Ordinance.

this section, every officer of the company who is in default, shall be
guilty of an offence and shall be liable to a fine not exceeding five
hundred rupees for every day during which the default continues :
Provided that, in case of default in delivering to the Registrar
within one month from the date of allotment, any document
required to be delivered by the provisions of this section, the
company, or any officer liable for such default, may make an
application to the court for relief, and the court, if satisfied that the
omission to deliver the document was accidental or due to
inadvertance or that it is just and equitable to grant relief, may make
an order extending the time for the delivery of the document for
such period as the court may deem fit.
COMMISSIONS AND DISCOUNTS

Power to pay
54. (1) It shall be lawful for a company to pay a commission to any certain
commissions
person in consideration of his subscribing or agreeing to subscribe, and prohibition of
payment of
whether absoutely or conditionally, for any shares in the company, all other
commissions,
or procuring or agreeing to procure subscriptions, whether absolute discounts,
&c.
or conditional, for any shares in the company, if—
(a) the payment of the commission is authorized by the articles;
and
(b) the commission paid or agreed to be paid does not exceed ten
per centum of the price at which the shares are issued or the
amount or rate per centum authorized by the articles,
whichever is the less; and
(c) the amount or rate per centum of the commission paid or
agreed to be paid is—
(i) in the case of shares offered to the public for subscription,
disclosed in the prospectus; or
(ii)in the case of shares not offered to the public for
subscription, disclosed in the statement in lieu of
prospectus, or in a statement in the prescribed form
signed in like manner as a statement in lieu of
prospectus and delivered before the payment of the
commission to the Registrar for registration, and,
where a circular or notice, not being a prospectus,
inviting subscription for the shares is issued, also
disclosed in that circular or notice; and
(d) the number of shares which persons have agreed for a
commission to subscribe absolutely is disclosed in a manner
referred to in paragraph (c).
(2) Save as provided in subsection (1), no company shall apply
any of its shares or capital money either directly or indirectly in
payment of any commission, discount, or allowance to any person in
consideration of his subscribing or agreeing to subscribe, whether
absolutely or conditionally, for any shares of the company, or
procuring or agreeing to procure subscriptions, whether absolute or
conditional, for any shares in the company, whether the shares or
money be so applied by being added to the purchase money of any
property acquired by the company
or to the contract price of any work to be executed for the company,

or that money be paid out of the nominal purchase money or contract
price, or otherwise.
(3) Nothing in this section shall affect the power of any company
to pay such brokerage as it has heretofore been lawful for a company
to pay.
(4) A vendor to, promoter of, or other person who receives

payment in money or shares from, a company shall have, and shall
be deemed always to have had, power to apply any part of the
money or shares so received in payment of any commission, the
payment of which, if made directly by the company, would have
been legal under the provisions of this section.

this section relating to the delivery to the Registrar of the statement
in the prescribed form, the company and every officer of the
company who is in default shall be guilty of an offence and shall be
liable to a fine not exceeding two hundred and fifty rupees.
55. (1) Subject as provided in this section, it shall not be lawful for Prohibition of
provision of financial
a company to give, whether directly or indirectly, and whether by assistance by
company for purchase
means of a loan, guarantee, the provision of security or otherwise, of or subscription
for its own, or its
holding company’s
any financial assistance for the purpose of or in connection with a shares
purchase or subscription made or to be made by any person of, or for

any shares in, the company, or, where the company is a subsidiary
company, in its holding company:
Provided that nothing in this section shall be taken to prohibit—
(a) where the lending of money is part of the ordinary business of a
company, the lending of money by the company in the
ordinary course of its business ;
(b) the provision by a company, in accordance with any scheme
for the time being in force, of money for the purchase of, or
subscription for, fully-paid shares in, the company or its
holding company, as the case may be, being a purchase or
subscription by trustees of or for shares to be held by, or for
the benefit of, employees of the company, including any
director holding a salaried, employment or office in the
company ;
(c) the making by a company of loans to persons, other than

directors, bona fide in the employment of the company with
a view to enabling those persons to purchase or subscribe for
fully-paid shares in the company or its holding company, as
the case may be, to be held by themselves by way of
beneficial ownership.
(2) Where a company acts in contravention of the provisions of

this section, the company and every officer of the company who is in
default shall be guilty of an offence and shall be liable to a fine not
exceeding one thousand rupees.
Construction
56. (l) Any reference in this Act to offering: of any shares or of reference
to offering
debentures to the public shall, subject to any provision to the shares or
debentures to
contrary contained therein, be construed as including a reference to the public.
offering them to any section of the public, whether selected as

members or debenture holders of the company concerned or as
clients of the person issuing the prospectus or in any other manner,
and references in this Act or in a company's articles to invitations to
the public to subscribe for shares or debentures shall, subject to the
preceding provisions, be similarly construed.
(2) The provisions of subsection (1) shall not be taken as

requiring any offer or invitation to be treated as made to the public if
it can properly be regarded, in all the circumstances as not being
calculated to result, directly or indirectly, in the shares or
debentures, becoming available for subscription or purchase by
persons other than those receiving the offer or invitation, or
otherwise as being a domestic concern of the persons making and
receiving it, and in particular :—
(a) a provision in a company's articles prohibiting invitations to the
public to subscribe for shares or debentures shall not be taken
as prohibiting the making to members or debenture holders of
an invitation which can properly be regarded as aforesaid ; and
(b) the provisions of this Act relating to private companies shall be

construed accordingly.
ISSUE OF REDEEMABLE PREFERENCE SHARES AND

SHARES AT A PREMIUM AND DISCOUNT Power to
issue
57. (1) A company limited by shares may, if so authorized by its redeemable
preference
articles, issue preference shares which are, or at the option of the shares.
company are to be liable, to be redeemed:

Provided that—
(a) no such shares shall be redeemed except out of profits of the
company which would otherwise be available for dividend or
out of the proceeds of fresh issue of shares made for the
purposes of the redemption;
(b) no such shares shall be redeemed unless they are fully paid;
(c) the premium, if any, payable on redemption, must have been
provided for out of the profits of the company or out of the
company's share premium account before the shares are redeemed;
and
(d) where any such shares are redeemed otherwise than out of the
proceeds of a fresh issue, there shall out of profits which would
otherwise have been available for dividend be transferred to a
reserve fund to be called the "Capital Redemption Reserve Fund" a
sum equal to the nominal amount of the shares redeemed and the
provisions of this Act, relating to the reduction of the share capital of
a company shall, except as provided in this section, apply as if the
Capital Redemption Reserve Fund were paid-up share capital of the
company.
(2) The redemption of preference shares under the provisions of

this section may be effected subject to such terms and in such
manner as may be provided by the articles of the company.
(3) The redemption of preference shares under the provisions of
this section by a company shall not be taken as reducing the amount
of the company's authorized share capital.
(4) Where in pursuance of the provisions of this section a

company has redeemed or is about to redeem any preference shares,
it shall have power to issue shares up to the nominal amount of the
shares redeemed or to be redeemed,
as the case may be, as if those shares had never been issued, and
accordingly the share capital of the company shall not for the
purposes of any enactments relating to stamp duty be deemed to be
increased by the issue of shares in pursuance of the provisions of this
subsection:
Provided that, where new shares are issued before the redemption
of the old shares, the new shares shall not, so far as they relate to
stamp duty, be deemed to have been issued in pursuance of the
provisions of this subsection unless shares are redeemed within one
month after the issue of the new shares.
(5) The Capital Redemption Reserve Fund may, notwithstanding anything in
this section, be applied by the company in paying up unissued shares of the
company to be issued to members of the company as fully-paid bonus shares.
58. (1) Where a company issues shares at a premium, whether Application of

premiums
for cash or otherwise, a sum equal to the aggregate amount or value received on
of the premium on those shares shall be transferred to an account, to issue of shares.
be called the "Share Premium Account", and the provisions of this

Act relating to the reduction of the share capital of a company shall,
except as provided in this section, apply as if the share premium
account were paid-up share capital of the company.
(2) The Share Premium Account may, notwithstanding anything

in subsection (1), be applied by the company in paying up unissued
shares, of the company to be issued to members of the company as
fully-paid bonus shares, in writing off—
(a) the preliminary expenses of the company; or
(b) the expenses of, or the commission paid or discount allowed
on, any issue of shares or debentures of the company,
or in providing for the premium payable on redemption of any
redeernable preference shares or of any debentures of the company.
(3) Where a company has before the appointed date issued any
shares at a premium, the provisions of this section shall apply as if
the shares had been issued on or after that date:
Provided that any part of the premium which has been so applied
that it does not on the appointed date form an identifiable part of the
company's reserves within the
meaning of the Fifth Schedule hereto shall be disregarded in
determining the sum to be included in the share premium account.
59. (1) It shall be lawful for the company to issue at a discount Power to
issue
shares in the company of a class of shares already issued: shares at a
discount.
Provided that—
(a) such issue is authorized by a resolution passed at a general
meeting of the company and is sanctioned by the court;
(b) the resolution shall specify the maximum rate of such
discount;
(c) not less than one year has, at the date, of such issue elapsed
since the date on which the company was entitled to
commence business ; and
(d) such issue is made within one month from the date on which the issue
is sanctioned by the court or within such extended time as the court may allow.
(2) Where a company has passed a resolution authorizing the

issue on shares at a discount, it may apply to the court for an order
sanctioning the issue and on any such application the court, if,
having regard to all the circumstances of the case, it thinks proper so
to do, may make an order sanctioning the issue subject to such terms
and conditions as it thinks fit.
(3) Every prospectus relating to the issue of the shares under the
provisions of subsection (1) shall contain particulars of the discount
allowed or of so much of that discount as has not been written off at
the date of the issue of the prospectus. Power of
company to
Where default is made in complying with the provisions of this arrange for
different
subsection, the company and every officer of the company who is in amounts
being paid on
shares.
default shall be guilty of an offence and shall be liable to a default
fine.
MISCELLANEOUS PROVISIONS AS TO SHARE CAPITAL

60. A company may, if so authorized by its articles, do one or
more of the following:—
(a) make arrangements on the issue of shares for a difference
between the shareholders in the amounts, and times of payment of
calls on their shares;
(b) accept from any member the whole or a part of the amount
remaining unpaid on any shares held by him, although no
part of that amount has been called up;
(c) pay dividend in proportion to the amount paid up on each share

where a larger amount is paid up on some shares than on
others.
61. A limited company may by special resolution determine Reserve

liability of
that any portion of its share capital which has not been already limited
company.
called up shall not be capable of being called up, except in the
event and for the purposes of the company being wound up, and
thereupon that portion of its share capital shall not be capable of
being called up except in such event and for such purposes.
Power of
company
limited by
62. (1) A company limited by shares or a company limited by shares to
alter its
share
guarantee and having a share capital, if so authorized by it's articles, capital.
may alter the conditions of its memorandum as follows, that is to

say, it may—
(a) increase its share capital by new shares of such amount as it
thinks expedient;
(b) consolidate and divide all or any of its share capital into
shares of larger amount than its existing shares ;
(c) convert all or any of its paid-up shares into stock, and
reconvert that stock into paid-up shares of any denomination ;
(d) subdivide its shares, or any of them, into shares of smaller
amount than is fixed by the memorandum, so however, that in the
sub-division the proportion between the amount paid and the
amount, if any, unpaid on each reduced share shall be the same as in
the case of the share from which the reduced share is derived ;
(e) cancel shares which, at the date of the passing of the
resolution in that behalf, have not been taken or agreed to be taken
by any person, and diminish the amount of its share capital by the
amount of the shares so cancelled.
(2) The powers conferred by the provisions of this section shall be exercised
by the company at a general meeting.
(3) A cancellation of shares in pursuance of the provisions of this

section shall not be deemed to be a reduction of share capital within
the meaning of this Act.
63. (1) Where company having a share capital has— Notice to

Registrar
(a) consolidated and divided its share capital into shares of larger of
consolidation of
amount than its existing shares; or share capital,
conversion of
(b) converted any shares into stock; or shares into stock,
&c.
(c) reconverted stock into shares,; or
(d) subdivided its shares or any of them; or
(e) redeemed any redeemable preference shares; or
(f) cancelled any shares otherwise than in connection with a
reduction of share capital under the provisions of section
67,
it shall, within one month from the date of so doing, give notice
thereof to the Registrar specifying, as the case may be, the shares
consolidated, divided, converted, subdivided, redeemed or cancelled,
or the stock reconverted.

fine.
Notice of
increase
64. (1) Where a company having a share capital, whether its of share
capital.
shares have or have not been converted into stock, has increased its
share capital beyond the registered capital, it shall with fifteen days
from the date of passing of the resolution authorizing the increase,
give to the Registrar notice thereof and the Registrar shall record
such increase.
(2) The notice to be given under the provisions of subsection (1)
shall include such particulars as may be prescribed with respect to
the classes of shares affected and the conditions subject to which the
new shares have been or are to be issued, and the company shall
forward to the Registrar together with such notice a copy of the
resolution authorizing such increase.

fine.
65. An unlimited company having a share capital may, by its
Power of
unlimited
resolution for registration as a limited company in pursuance of the company to
provide for
provisions of this Act, do either or both of the following, namely :— reserve share
capital on
(a) increase the nominal amount of its share capital by increasing registration.
the nominal amount of each of its shares, but subject to the

condition that no part of the increased capital shall be
capable of being called up ;
(b) notify that a specified portion of its uncalled share capital
shall not be capable of being called up,
Power of
company to
except in the event and for the purposes of the company being wound up. pay interest out
of capital in
certain cases.
66. Where any shares of a company are issued for the purpose of
raising money to defray the expenses of the construction of any
works or buildings or the provision of any plant which cannot be
made profitable for a long period of time, the company may pay
interest on so much of that share capital as is for the time being paid
up for the period and subject to the conditions and restrictions set out
in this section and may charge the sum so paid by way of interest to
capital as part of the cost of construction of the work or building, or
the provision of the plant, as the case may be :
Provided that—
(a) no such sum shall be paid unless it is authorized by the articles
or by special resolution ;
(b) no such sum, whether authorized by the articles or by special
resolution, shall be paid without the previous sanction of the
court;
(c) before sanctioning the payment of any such sum, the court may
at the expense of the company, appoint a person to inquire
and report to the court as to the circumstances of the case,
and may, before making the appointment, require the
company to give security for the payment of the costs of the
inquiry.
(d) the payment shall be made only for such period as may be
determined by the court, and that period shall in no case
extend beyond the close of the half-year next after the half-
year during which the works or buildings have been actually
completed or the plant provided, as the case may be ;
(e) the rate of interest shall in no case exceed such rate as may for
the time being be prescribed by regulation ;
(f) the payment of the interest shall not operate as a reduction of
the amount paid up on the shares in respect of which it is
paid.
REDUCTION OF SHARE CAPITAL

Special resolution
67. (1). Subject to confirmation by the court, a company limited for reduction of
share capital
by shares or a company limited by guarantee and having a share
capital may, if so authorized by its articles, by special resolution
reduce its share capital and also may—
(a) extinguish or reduce the liability on any of its shares in
respect of share capital not paid up; or
(b) either with or without extinguishing or reducing liability on
any of its shares cancel any paid-up share capital which is
lost or unrepresented by available assets; or
(c) either with or without extinguishing or reducing liability on
any of its shares, pay off any paid-up share capital which is
in excess of the wants of the company,
and may, so far as it is necessary, alter its memorandum by reducing

the amount of its share capital and of its shares accordingly.
(2) A special resolution made under the provisions of subsection

(1) is in this Act referred to as "a resolution for reducing share
capital".
Application to court for

confirming order,
68. (1) Where a company has passed a resolution for reducing objections by creditors,
and settlement of list of
share capital, it may make an application to the court for an order objecting creditors.
confirming the reduction.

(2) Where the proposed reduction of share capital involves
either diminution of liability in respect of unpaid share capital or the
payment to any share holder of any, paid-up share capital, and in any
other case if the court so directs,
the following provisions shall, subject to the provisions of
subsection (3), apply:—
(a) every creditor of the company who at the date fixed by the
court is entitled to any debt or claim which, if that date were the
commencement of the winding up of the company, would be
admissible in proof against the company, shall be entitled to object
to the reduction;
(b) the court shall settle a list of creditors so entitled to object,

and for that purpose shall ascertain, as far as possible without
requiring an application from any creditor, the names of those
creditors and the nature and amount of their debts or claims, and
may publish notices fixing a day or days within which creditors
whose names have not been entered on such list are to claim to be so
entered or are to be excluded from the right of objecting to the
reduction;
(c) where a creditor whose name has been entered on such list
whose debt or claim is not discharged or has not determined does not
consent to the reduction, the court may, if it thinks fit, dispense with
the consent of that creditor, on the company securing payment of his
debt or claim by appropriating, as the court may direct, the following
amount:—
(i) where the company admits the full amount of the debt or
claim, or though not admitting it, is willing to provide for it,
the full amount of the debt or claim ;
(ii) where the company does not admit, and is not willing to
provide for, the full amount of the debt or claim, or if the
amount is contingent or not ascertained, an amount fixed by
the court after the like inquiry and adjudication as if the
company were being wound up by the court.
(3) Where a proposed reduction of share capital involves either

the diminution of any liability in respect of unpaid share capital or
the payment to any shareholder of any paid-up share capital, the
court may, if having regard to any special circumstances of the case
it thinks proper so to do, direct that the provisions of subsection (2)
shall not apply as regards any class or any classes of creditors.
Order
69. (1) The court, if satisfied, with respect to every creditor of the confirming
reduction
and powers of
company who under the provisions of section 68 is entitled to object court on making
such order.
to the reduction, that either his consent to the reduction has been
obtained or his debt or claim has been discharged or has determined,
or has been secured, may make an order confirming the reduction on
such terms and conditions as it thinks fit,
(2) Where the court makes any such order, it may—

(a) if for any special reason it thinks proper so to do, make an
order directing that the company shall, during such period,
commencing on or at any time after the date of the order, as is
specified in the order, add to its name as the last words thereof the
words "and reduced " ; and
(b) make an order requiring the company to publish in such
manner as the court directs the reasons for the reduction or such
other information in regard thereto as the court may think expedient
with a view to giving proper information to the public, and, if the
court thinks fit, the causes which led to the reduction.
(3) Where a company is ordered to add to its name the words

"and reduced", those words shall, until the expiration of the period
specified in the order, be deemed to be part of the name of the
company.
Registration
70. (1) The Registrar shall on production to him of an order of the of order
and
court confirming the reduction of the share capital of a company, minute
of
and the delivery to him of a copy of the order and of a minute reduction
approved by the court, showing with respect to the share capital of

the company, as altered by the order, the amount of the share capital,
the number of shares into which it is to be divided, and the amount
of each share, and the amount, if any, at the date of the registration
deemed to be paid on each share, register the order and minute.
(2) On the registration of the order and minute under the

provisions of subsection (1), the resolution for reducing share
capital as confirmed by the order so registered shall take effect.
(3) Notice of the registration shall be published in such manner as

the court may direct.
(4) The Registrar shall issue a certificate, authenticated by the seal
prepared under the provisions of section 390, of the registration of
the order and minute, and such certificate shall be conclusive
evidence that all requirements of this Act, with respect to reduction
of share capital have been complied with and that the share capital of
the company is such as stated in the minute.
(5) The minute referred to in subsection (1) when registered shall
be deemed to be substituted for the corresponding part of the
memorandum, and shall be as valid and effectual as if it had been
originally contained therein.
(6) The substitution of any such minute as referred to in
subsection (1) for part of the memorandum of the company shall be
deemed to be an alteration of the memorandum within the meaning
of section 27.
Liability of
71. (1) In the case of a reduction of share capital, a member of the members in
respect of
reduced
company, past or present, shall not be liable in respect of any share shares.
to any call or contribution exceeding in amount the difference, if

any, between the amount of the share as fixed by the minute and the
amount paid, or the reduced amount, if any, which is to be deemed
to have been paid, on the share, as the case may be:
Provided that if any creditor, entitled in respect of any debt or

claim to object to the reduction of share capital, is, by reason of his
ignorance of the proceedings for reduction, or of the nature and
effect of such proceedings with respect to his claim, not entered on
the list of creditors, and, after the reduction, the company is unable,
within the meaning of the provisions of this Act, with respect to
winding up by the court, to pay the amount .of his debt or claim,
then—
(a) every person who was a member of the company at the date of
the registration of the order for reduction, and the minute,
shall be liable to contribute for the payment of that debt
or claim an amount not exceeding the amount which he
would have been liable to contribute it the company had
commenced to be wound up on the day before the said
date; and
(b) if the company is wound up, the court, on the application of
any such creditor and proof of his ignorance as aforesaid,
may, if it thinks fit, settle accordingly a list of persons so
liable to contribute, and make and enforce calls and
orders on the contributories, settled on the list, as if they
were ordinary contributories in a winding up.
6—A63756 (82/05)
(2) Nothing in this section shall affect the right of the
contributories among themselves.
Penalty
72. Where any officer of the company— on concealment
of name of
(a) wilfully conceals the name of any creditor entitled to object to creditor
the reduction; or
(b) wilfully misrepresents the nature or amount of the debt or
claim of any creditor; or
(c) aids, abets or is privy to any such concealment or
misrepresentation as referred to in paragraph (b),
he shall be guilty of an offence and shall be liable to a fine not

exceeding one thousand rupees or to imprisonment of either
description for a term not exceeding one year, or to both such fine
and imprisonment.
VARIATION OF SHAREHOLDERS' RIGHTS
73. (1) Where in the case of a company, the share capital of Rights of holders
of special
classes of
which is divided into different classes of shares, provision is made shares.
by the memorandum or articles for authorizing the variation of the

rights attached to any class of shares in the company, subject to the
consent of any specified proportion of the holders of the issued
shares of that class or the sanction of a resolution passed at a
separate meeting of the holders of those shares, and in pursuance of
the said provision the rights attached to any such class of shares are
at any time varied, the holders of not less in the aggregate than
fifteen per centum of the issued shares of that class, being persons
who did not consent to, or vote in favour of the resolution for the
variation, may make an application to the court to have the variation
cancelled, and, any such application is made, the variation shall not
have effect unless and until it is confirmed by the court.
(2) An application under the provisions of subsection (1) shall be

made within twenty-one days from the date on which the consent
was given or the resolution was passed, as the case may be, and
may be made on behalf of the shareholders entitled to make the
application by such one or more of their number as they may
appoint in writing for the purpose.
(3) On any application made under the provisions of subsection

(1), the court, after hearing the applicant and any other persons
who make an application to the court
to be heard and appear to the court to be interested in the application

may, if it is satisfied, having regard to all the circumstances of the
case, that the variation would unfairly prejudice the shareholders of
the class represented by the applicant, disallow the variation and
shall, if not so satisfied, confirm the variation.
(4) The decision of the court on any application made under the
provisions of subsection (1) shall be final.
(5) The company shall, within fifteen days from the date of an
order by the court on any application made under the provisions of
subsection (1), forward a copy of such order to the Registrar and,
where default is made in complying with the provisions of this
section, the company and every officer of the company who is in
fine.
(6) In this section the expression "variation" includes abrogation

and the expression "varied" shall be construed accordingly.
TRANSFER OF SHARES AND DEBENTURES,

EVIDENCE OF TITLE, &C.
74. (1) The shares or other interest of any member in a company Nature of
shares.
shall, be movable property, transferable in the manner provided by
the articles of the company, and shall not be of the nature of
immovable property.
(2) Each share in a company having a share capital shall be distinguished by its
Transfer not to
appropriate number. be registered
except on
production
of
instrument of
transfer.
75. Notwithstanding anything in the articles of a company, it shall
not be lawful for the company to register a transfer of shares in or
debentures of the company unless a proper instrument of transfer has
been delivered to the company:
Provided that nothing in this section shall prejudice any power of

the company to register as shareholder or debenture holder, any
person to whom the right of any shares in or debentures of the
company has been transmitted by operation of law.
Transfer by
76. A transfer of the shares or other interests of a deceased legal
representative.
member of a company made by his legal representative shall,
although the legal representative is not himself a member of the
company, be as valid as if he had been such a member at the time of
the execution of the instrument of transfer.
Registration of
transfer at
request of
77. On the application of the transferor of any share or other transferor.
interest in a company, the company shall enter in its register of

members the name of the transferee in the same manner and subject
to the same conditions as if the application for the entry were made Notice of
refusal to
by the transferee. register
transfer.
78. (1) Where a company refuses to register a transfer of any

shares or debentures, the company shall, within two months from the
date on which the transfer was lodged with the company, send to the
transferee notice of the refusal.
(2) Where default is made in complying with the provisions of this Certification
of transfers.
section the company and every officer of the company who is in
fine.
79. (1) The certification by a company of any instrument of

transfer of shares in or debentures of the company shall be taken as
representation by the company to any person acting on the faith of
the certification that there have been produced to the company such
documents as on the face of them show a prima facie title to the
shares or debentures in the transferor named in the instrument of
transfer, but not as representation that the transferor has any title to
the shares or debentures.
(2) Where any person acts on the faith of a false certification by a
company made negligently, the company shall be under the same
liability to him as if the certification had been made fraudulently.

(a) an instrument of transfer shall be deemed to be certified if
it bears the words " certificate lodged " or words to
the like effect;
(b) the certification of an instrument of transfer shall be
deemed to be made by a company if—
(i) the person issuing the instrument is a person
authorized to issue certificated instruments of
transfer on the company's behalf; and
53 Companies Act, No. l7 of 1982
(ii) the certification is signed by a person authorized to

certificate transfers on the company's behalf or by any
officer or servant either of the company or of a body
corporate so authorized ;
(c) a certification shall be deemed to be signed by any person, if—
(i) it purports to be authenticated by the signature or initials
whether handwritten or not; and
(ii) it is not shown that the signature or initials was or were
placed there neither by himself nor by any person
authorized to use the signature or initials for the purpose Duties of
company
of certificating transfers on the company’s behalf. with
respect
to issue of
certificates.
80. (1) Every company shall, within two months from the date of
allotment of any of its shares, debentures, or debenture stock and
within two months from the date on which a transfer of any such
shares, debentures, or debenture stock, is lodged with the company,
complete and have ready for delivery the certification of all shares,
the debentures, and the certificates of all debenture stock allotted or
transferred, unless the conditions of issue of the shares, debentures,
or debenture stock provide otherwise.
For the purposes of this subsection the expression "transfer"

means a transfer duly stamped and otherwise valid, and does not
include such a transfer as the company is for any reason entitled to
refuse to register and does not register.

this section the company and every officer of the company who is
in default shall be guilty of an offence and shall be liable to a
default fine.
(3) Where any company on whom a notice has been served

requiring the company to make good any default in complying with
the provisions of subsection (1) fails to make good the default within
ten days from the date of service of the notice, the court may, on the
application of the person entitled to have the certificates, or the
debentures delivered to him, make an order directing the company,
and any officer of the company to make good the default within such
time as may be specified in the order, and any such order may provide that all
costs of and incidental to the application shall be borne by the company or any
officer of the company responsible for the default.
81. A certificate, under the common seal of the company, Certificate to

be
evidence of
specifying any shares held by any member, shall be prima facie title.
evidence of the title of the member to the shares.
Evidence of
82. The production to a company of any document which by law grant of
probate, &c.
is sufficient evidence of probate of the will, or letters of
administration of the estate, or confirmation as executor, of a
deceased person having been granted to some person shall be
accepted by the company, notwithstanding anything in its articles, as
Issue and effect
sufficient evidence of the grant. of share
warrants to
bearer.
83. (1) A company limited by shares, if so authorized by its

articles, may, with respect to any fully paid-up shares, issue under its
common seal a warrant stating that the bearer of such warrant is
entitled to the shares therein specified, and may provide, by coupons
or otherwise, for the payment of the future, dividends on the shares,
included in the warrant.
(2) Such a warrant as is referred to in subsection (1) is in this Act

referred to as a "share warrant".
Offences in
connection
(3) A share warrant shall entitle the bearer thereof to the shares with
share
warrants.
specified in such share warrant, and the shares may be transferred
by delivery of the warrant.
84. (1) Where any person—

(a) with intent to defraud, forges or alters, or offers, utters,
disposes of, or puts off, knowing the same to be forged or
altered, any share warrant or coupon, or any document
purporting to be a share warrant or coupon, issued in
pursuance of this Act; or
(b) by means of any such forged or altered share warrant, coupon,
or document, purporting as aforesaid, demands or
endeavours to obtain or receive any share or interest in any
company under this Act, or to receive any dividend or
money payable in respect thereof, knowing the warrant,
coupon or document to be forged or altered ; or
(c) falsely and deceitfully personates any owner of any share or

interest in any company, or of any share warrant or coupon,
issued in pursuance of this Act, and thereby obtains or
endeavours to obtain any such share or interest or share
warrant or coupon or receives or endeavours to receive any
money due to any such owner, as if the offender were the
true and lawful owner,
he shall be guilty of an offence and shall be liable to imprisonment
of either description for a term not less than three years and not
exceeding twenty years.
(2) Where any person without lawful authority or excuse, proof

whereof shall lie on him—
(a) engraves or makes on any plate, wood, stone, or other material
any share warrant or coupon purporting to be—
(i) a share warrant or coupon issued or made by any particular
company in pursuance of this Act; or
(ii) a blank share warrant or coupon so issued or made; or
(iii) a part of such share warrant or coupon ; or
(b) uses any such plate, wood, stone, or other material for the
making or printing of any such share warrant or coupon, or of
any such blank share warrant or coupon, or any part thereof
respectively; or
(c) knowingly has in his custody or possession any such plate,
wood, stone, or other material,
he shall be guilty of an offence and shall be liable to imprisonment of either
description for a term not less than three years and not exceeding fourteen years.
SPECIAL PROVISIONS AS TO DEBENTURES

Right of
debenture
holders and
share holders
to inspect
register of
debenture
holders and
to have copies
of trust deed.
85. (1) Every company which has issued debentures shall maintain
a register of holders of debentures of the company. The register shall,
except when duly closed (but subject to such reasonable restrictions as the
company may in general meeting impose so that not less than two hours in
each day shall be allowed for inspection), be open to the inspection of the
registered holder of any such debentures or any holder of shares in the
company without fee, and of any other person on payment of a fee of ten
rupees or such less sum as may be specified by the company.
56 Companies Act, No. 17 of
1982
(2) For the purposes of subsection (1), a register shall be deemed
to be duly closed if closed in accordance with the provisions
contained in the articles or in the debentures, or in the case of
debenture stock, in the stock certificates, or in the trust deed or other
document securing the debentures or debenture stock, during such
period or periods, not exceeding in the whole thirty days in any year,
as may be therein specified.
(3) Any such registered holder of the debentures or holder of

shares as aforesaid or any other person may require a copy of the
register of the holders of debentures of the company or any part
thereof to be furnished on payment of a sum not exceeding one
rupee for every hundred words required to be copied.
(4) A copy of any trust deed for securing any issue of debentures
shall be forwarded to every holder of any such debentures at his
request on payment in the case of a printed trust deed of the sum of
ten rupees or such less sum as may be specified by the company, or,
where the trust deed has not been printed, on payment of a sum not
exceeding one rupee for every hundred words required to be copied.
(5) Where inspection of the register is refused or a copy as

aforesaid is refused or not forwarded, the company and every officer
of the company who is in default shall be guilty of an offence and
shall be liable to a fine not exceeding two hundred and fifty rupees
and further shall be liable to a fine of twenty rupees for every day the
default continues.
(6) Where a company is in default as referred to in subsection (5)
the court may by order compel an immediate inspection of the
register or direct that any copy required as aforesaid shall be sent to
the person requiring them.
86. A director of a company shall not be capable of being Directors prohibited

from acting
appointed as a trustee for the holders of debentures of the company: as trustees.
Provided that the provisions of this section shall not apply to any
director of a company who holds office as a trustee for the holders of
debentures of the company by virtue of an appointment made before
the appointed date, and accordingly any such director may continue
in office, as such trustee until the termination of that appointment.
87. A condition contained in any debentures or in any deed for Perpetual

debentures
securing any debentures, whether issued or executed before or after
the appointed date, shall not be invalid by reason only that the
debentures are thereby made irredeemable or redeemable only on the
happening of a contingency, however remote, or on the expiration of
the period, however long.
Power to
88. (1) Where either before or after the appointed date a reissue
redeemed debentures
company has redeemed any debentures previously issued, then— in certain cases.
(a) unless any provision to the contrary, whether express or

implied, is contained in the articles or in any contract entered into by
the company ; or
(b) unless the company has by passing a resolution to that effect
or by some other act, manifested its intention that the debentures
shall be cancelled,
the company shall have, and shall be deemed always to have had,
power to reissue the debentures, either by reissuing the same
debentures or by issuing other debentures in their place.
(2) On a reissue of redeemed debentures the person entitled to

the debentures shall have, and shall be deemed always to have had,
the same priorities as if the debentures had never been redeemed.
(3) Where a company has either before or after the appointed

date deposited any of its debentures to secure advances from time to
time on current account or otherwise, the debentures shall not be
deemed to have been redeemed by reason only of the account of the
company having ceased to be in debit whilst the debentures
remained so deposited.
(4) The reissue of a debenture or the issue of another debenture in its place
under the power by this section given to, or deemed to have been possessed by, a
company, whether the reissue or issue was made before or after the appointed
date, shall be treated as the issue of a new debenture for the purposes of stamp
duty, but it shall not be so treated for the purposes of any provision limiting the
amount or number, of debentures to be issued :
Provided that any person lending money on the security of a

debenture reissued under the provisions of this section which
appears to be duly stamped may give the debenture in
evidence in any proceedings for enforcing his security without
payment of the stamp duty or any penalty in respect thereof, unless
he had notice or, but for his negligence, might have discovered, that
the debenture was not duly stamped but in any such case the
company shall be liable to pay the proper stamp duty and penalty.
(5) The reissue after the appointed date of debentures redeemed
before that date shall not prejudice any right or priority which any
person would have had under or by virtue of any mortgage or charge
Specific
created before that date. performance of
contracts to
subscribe for
debentures.
89. A contract with a company to take up and pay for any
debentures of the company may be enforced by an order for specific Payment of
certain debts
performance. out of assets
subject to
floating charge
in priority to claims under the
charge.
90. (1) Where either a receiver is appointed on behalf of the

holders of any debentures of the company secured by a floating
charge, or possession is taken by or on behalf of those debenture
holders of any property comprised in or subject to the charge, then,
if the company is not at the time in course of being wound up, the
debts which in every winding up are under the provisions of Part IX
relating to preferential payments to be paid in priority to all other
debts, shall be paid out of any assets coming to the hands of the
receiver or other person taking possession as aforesaid in priority to
any claim for principal or interest in respect of the debentures.
(2) In the application of the provisions of Part IX, the provisions

of section 347 shall be construed as if the provision for payment of
accrued holiday remuneration becoming payable on the termination
of employment before or by the effect of the winding-up order or
resolution were a provision for payment of such remuneration
becoming payable on the termination of employment before or by
effect of the appointment of receiver or possession being taken as
referred to in subsection (1).
(3) The periods of time specified in the said provisions of Part IX

shall be reckoned from the date of the appointment of the receiver or
of possession being taken as aforesaid, as the case may be.
(4) Where the date referred to in subsection (3) occurred before

the appointed date, the provisions of subsections (1) and (3) shall
have effect with the substitution for references to the said provisions
of Part IX, of references to the provisions which, by virtue of
subsection (9) of section 347 are deemed to remain in force in the
case therein mentioned, and the provisions of subsection (2) of this
section shall not apply.
(5) Any payments made under the provisions of this section shall
be recouped as far as may be out of the assets of the company
available for payment of general creditors.
PART III
REGISTRATION OF CHARGES
REGISTRATION OF CHARGES WITH REGISTRAR
91. (1) Subject to the provisions of this Part, every charge Registration
of charges created by
created after the appointed date by a company registered in Sri companies registered
in
Sri Lanka.
Lanka and being a charge to which the provisions of this section
applies shall, so far as any security on the company's property or
undertaking is conferred thereby, be void against the liquidator and
any creditor of the company, unless the prescribed particulars of the
charge, together with the instrument, if any, by which the charge is
created or evidenced, or a copy thereof certified by a notary public,
are delivered to or received by the Registrar for registration in
manner required by this Act within twenty-one days from the date of
its creation, but without prejudice to any contract or obligation for
repayment of the money thereby secured, and when a charge
becomes void under the provisions of this section the money secured
thereby shall immediately become payable.
(2) The provisions of this section shall apply to the following charges:—
(a) a charge for the purpose of securing any issue of debentures;
(b) a charge on uncalled share capital of the company;
(c) a charge created or evidenced by an instrument which, if
executed by an individual, would require registration as a
bill of sale ;
(d) a charge on land, wherever situate, or any interest therein ;

(e) a charge on book debts of the company;
(f) a floating charge on the undertaking or property of the
company ;
(g) a charge on calls made but not paid;
(h) a charge on a ship or aircraft or any share in a ship or aircraft;
(i) a charge on goodwill, on a patent or a licence under a
patent, on a trade mark or on a copyright or a licence
under a copyright.
(3) In the case of a charge created outside Sri Lanka comprising

property situate outside Sri Lanka, the delivery to and the receipt by
the Registrar of a copy verified in the prescribed manner of the
instrument by which the charge is created or evidenced, shall have
the same effect for the purposes of this section as the delivery and
receipt of the instrument itself, and twenty-one days from the date on
which the instrument or copy could, in due course of post, and if
despatched with due diligence, have been received in Sri Lanka,
shall be substituted for twenty-one days from the date of the creation
of the charge, as the time within which the particulars and
instrument or copy are to be delivered to the Registrar.
(4) Where a charge is created in Sri Lanka, but comprises property

outside Sri Lanka, the instrument creating or purporting to create the
charge may be sent for registration under the provisions of this
section notwithstanding that further proceedings may be necessary to
make the charge valid or effectual according to the law of the
country in which the property is situate.
(5) Where a charge comprises property situate outside Sri Lanka
and registration in the country where the property is, situate is
necessary to make the charge valid or effectual according to the law
of that country, the delivery to and the receipt by the Registrar of a
copy, verified in the prescribed manner, of the instrument by which
the charge is created or evidenced, together with a certificate in the
prescribed form stating that the charge was presented for
registration in the country where the property is situate on the date
on which it was so presented shall, for the purposes of this section,
have the same effect as the delivery and receipt of the instrument
itself.
(6) Where a negotiable instrument has been given to secure the payment of
any book debts of a company the deposit of the instrument for the purpose of
securing an advance to the company shall not for the purposes of this section be
treated as a charge on those book debts.
(7) The holding of debentures entitling the holder to a charge on land shall not
for the purposes of this section be deemed to be an interest in land.
(8) Where a series of debentures, containing or giving by reference to any

other instrument, any charge to the benefit of which the debenture holders of that
series are entitled pari passu is created by a company it shall for the purposes of
this section be sufficient if they are delivered to or received by the Registrar
within twenty-one days from the date of execution of the deed containing the
charge or, if there is no such deed, from the date of execution of any debentures of
the series, the following particulars—
(a) the total amount secured by the whole series; and
(b) the dates of the resolution authorising the issue of the series and the date
of the covering deed, if any, by which the security is created or defined;
and
(c) a general description of the property charged; and
(d) the names of the trustees, if any, for any debenture holders,
together with the deed containing the charge or a copy thereof verified in the
prescribed manner, or if there is no such deed, one of the debentures of the series:
Provided that, where more than one issue is made of debentures in the series,
there shall be sent to the Registrar for entry in the register, particulars of the date
and amount of each issue. Any omission to send such particulars shall not affect
the validity of the debentures issued.
(9) Where any commission, allowance or discount has been paid or made
either directly or indirectly by a company to any person in consideration of his
subscribing or agreeing to subscribe, whether absolutely or conditionally, for any
debentures of the company, or procuring or agreeing to procure subscriptions,
whether absolute or conditional, for any such debentures, the particulars required
to be sent for registration under the provisions of
this section shall include particulars as to the amount or rate per centum of the
commission, discount or allowance as paid or made. Any omission to send such
particulars shall not affect the validity of the debentures issued;
Provided that the deposit of any debentures as security for any debt of the
company shall not for the purposes of this subsection be treated as the issue of the
debentures at a discount.
(10) Nothing in section 63 of the Mortgage Act shall apply to or in relation to

any floating charge on the undertaking or property of a company.
(11) The provisions of this section shall be in addition to and not in

substitution of any other written law relating to the registration of any document or
instrument creating or purporting to create a charge on any property whether
movable or immovable.
(12) In this Part, the expression “charge” includes mortgage.
Duty of company
92. (1) It shall be the duty of a company to send in the prescribed form to the to register
charges
Registrar for registration the particulars of every charge created by the company created by
and of the issues of debentures of a series requiring registration under the company.
provisions of section 91. Registration of any such charge may be effected on the
application of any person interested therein.
(2) Where registration is effected on the application of some person other than
the company, that person shall be entitled to recover from the company the
amount of any fees properly paid by him to the Registrar.
(3) Where any company makes default in sending to the Registrar for
registration the particulars of any charge created by the company, or of the issues
of debentures of a series, requiring registration as aforesaid, then, unless the
registration has been effected on the application of some other person, the
company and every officer of the company who is in default shall be liable to a
fine of five hundred rupees.
93. (1) Where after the appointed date a company registered in Duty of
company to
Sri Lanka acquires any property which is subject to a charge of any register
such kind as would, if it had been created by the company, after the charges
existing on
acquisition of the property, have been required to be registered under property
this Part, the company shall cause the prescribed particulars of the acquired.
charge, together with a copy (certified in the prescribed manner to be

a correct copy) of the instrument, if any, by which the charge was
created or is evidenced, to be delivered to the Registrar for
registration in the manner required by this Act, within twenty-one
days from the date on which the acquisition is completed:
Provided that, if the property is situate and the charge was created
outside Sri Lanka, twenty-one days from the date on which the copy
of the instrument could in due course of post, and if despatched with
due diligence, have been received in Sri Lanka, shall be substituted
for twenty-one days from the date of completion of the acquisition
as the time within which the particulars and the copy of the
instrument are to be delivered to the Registrar. Register of
charges to be
kept by
(2) Where default is made in complying with this section the Registrar.
company and every officer of the company who is in default shall be
guilty of an offence and shall be liable to a fine of five hundred
rupees.
94. (1) The Registrar shall keep, with respect to each company, a
register in the prescribed form of all the charges requiring
registration under this Part, and shall, on payment of the prescribed
fee, enter in the register with respect to such charges the following
particulars:—
(a) in the case of a charge to the benefit of which the holders of a
series of debentures are entitled, such particulars as are
specified in subsection (8) of section 91;
(b) in the case of any other charge—
(i) if the charge is a charge created by the company, the date
of its creation, and if the charge was a charge existing
on property acquired by the company, the date of the
acquisition of the property ; and
(ii) the amount secured by the charge; and
(iii) short particulars of the property charged ; and
(iv) the persons entitled to the charge :
Provided, however, that the fee prescribed for the registration of any
charge under the provisions of this section shall be in substitution for
and not in addition to, any fee which would otherwise be payable in
respect of such registration.
(2) The Registrar shall issue a certificate authenticated by the seal

prepared under the provisions of section 390 of the registration of
any charge registered in pursuance of this Part, stating the amount
thereby secured, and the certificate shall be conclusive evidence. that
the requirements of this Part, as to, registration have been complied
with.
(3) The register kept in pursuance of the provisions of this section

shall be open to inspection by any person on payment of the
prescribed fee.
95. (1) The company shall cause a copy of every certificate of Endorsement of
certificate of
registration given under the provisions of section 94 to be endorsed registration on
debentures.
on every debenture or certificate of debenture stock which is issued
by the company, and the payment of which is secured by the charge
so registered:
Provided that nothing in the provisions of this subsection shall be

construed as requiring a company to cause a certificate of
registration of any charge so given to be endorsed on any debenture
or certificate of debenture stock issued by the company before the
charge was created.
(2) Where any person knowingly and wilfully authorizes or
permits the delivery of any debenture or certificate of debenture
stock which under the provisions of this section is required to have
endorsed on it a copy of a certificate of registration without the copy
being so endorsed upon it, he shall, without prejudice to any other
liability, be guilty of an offence and be liable to a fine not exceeding
one thousand rupees.
Duty of company
to inform
96. (1) Where— Registrar of
release of property
(a) the debt for which any registered charge was given has been from charge and
of Registrar to
paid or satisfied in whole or in part; or enter
memorandum of
(b) any part of the property or undertaking charged has been satisfaction.
released from the charge or has ceased to form part of a

company's property or undertaking,
it shall be the duty of the company to send to the Registrar a
statement to that effect in the prescribed form.
(2) Upon the receipt of a statement sent by a company under the

provisions of subsection (1) the Registrar may, on his being satisfied
as to the correctness of such statement, enter on the register a
memorandum of satisfaction in whole or in part, or of the fact that
part of the property or undertaking has been released from the
charge or has ceased to form part of the company's property or
undertaking, as the case may be.
(3) Where any company makes default in complying with the

provisions of subsection (1), every officer of the company who is in
default shall be guilty of an offence and shall be liable to fine not
exceeding five hundred rupees for every day during which the
default continues.
97. The court, on being satisfied that the omission to register a Rectification of
register of
charges.
charge within the time required by this Act, or that the omission or
mis-statement of any particular with respect to any such charge or in
a memorandum of satisfaction, was accidental, or due to
inadvertence or to some other sufficient cause, or is not of a nature
to prejudice the position of creditors or shareholders of the company,
or that, on other grounds, it is just and equitable to grant relief, may,
on the application of the company or any person interested, and on
such terms and conditions as seem to the court just and expedient,
order that the time for registration shall be extended, or that the
omission or mis-statement shall be rectified, as the case may be.
98. (1) Where any person obtains an order for the appointment of Registration of
enforcement of
security.
a receiver or manager of the property of a company, or appoints such
a receiver or manager under any powers contained in any
instrument, he shall, within seven days from the date of the order or
of the appointment under the said powers, give notice of the fact to
the Registrar who shall, on payment of the prescribed fee, enter the
fact in the register of charges.
(2) Where any person appointed receiver or manager of the

property of a company under the powers, contained in any
instrument ceases to act as such receiver or manager, he shall, on so
ceasing, give the Registrar notice to that effect, and the Registrar
shall enter the notice in the register of charges.
7—A 63752 (82/06)

(3) Where any person makes default in complying with the

requirements of this section he shall be guilty of an offence and shall
be liable to a fine not exceeding two hundred and fifty rupees for
every day during which the default continues.
PROVISIONS AS TO COMPANY'S REGISTER OF CHARGES AND AS

TO COPIES OF INSTRUMENTS CREATING CHARGES
Copies of
99. Every company shall cause a copy of every instrument creating instruments
creating charges
any charge requiring registration under this Part to be kept at the to be kept by
company.
registered office of the company :
Provided that, in the case of a series of uniform debentures, a copy

of one debenture of the series shall be sufficient.
100. (1) Every limited company shall keep a register of charges and Company’s
register of
charges
enter therein all charges specifically affecting property of the
company and all floating charges on the undertaking or any property
of the company, giving in each case a short description of the
property charged, the amount of the charges, and, except in the case
of securities to bearer, the names of the persons entitled thereto.
(2) Any officer of the company who knowingly and wilfully

authorizes or permits the omission of any entry required to be made
under the provisions of this section, shall be guilty of an offence and
shall be liable to a fine not exceeding five hundred rupees.
101. (1) The copies of instruments creating any charge requiring Right to inspect
copies of
instruments
registration under this Part with the Registrar, and the register of creating
mortgages and
charges kept under the provisions of section 100, shall be open charges and
company’s
register of charges
during business hours (but subject to such reasonable restrictions as
the company at a general meeting may impose, so that not less than
two hours in each day shall be allowed for inspection) to the
inspection of any creditor or member of the company without fee,
and the register of charges shall also be open to the inspection of
any other person on payment of such fee as the company may
specify.
(2) Where inspection of the said copies or register is refused

any officer of the company refusing inspection, and every officer of
the company who is in default shall be
guilty of an offence and shall be liable to a fine not exceeding two
hundred and fifty rupees and a further fine not exceeding twenty
rupees for every day during which the refusal continues.
(3) Where any such refusal occurs in relation to a company

registered in Sri Lanka, the court may by order compel an immediate
inspection of the copies or register referred to in subsection (1).
APPLICATION OF PART III TO COMPANIES INCORPORATED

OUTSIDE SRI LANKA
Application of
102. The provisions of this Part shall extend to charges on Part III to
charges created, and
property subject
property in Sri Lanka which are created, and to charges on property to charge acquired
by company
in Sri Lanka which is acquired, after the appointed date by a incorporated
outside
company (whether a company within the meaning of this Act or not) Sri Lanka.
incorporated outside Sri Lanka which has an established place of

business in Sri Lanka.
PART IV
MANAGEMENT AND ADMINISTRATION
REGISTERED OFFICE AND NAME
Registered Registered
103. (1) A company shall as from the day on which it begins to carry
office office
of company.
on business or as from the fourteenth day after the date of its
incorporation, whichever is the earlier, have a registered office to
which all, communications and notices may be addressed.
(2) Notice of the situation of the registered office, and of any

change therein, shall be given within fourteen days from the date of
the incorporation of the company or of the change, as the case may
be, to the Registrar who shall record the same.
The inclusion in the annual return of a company or a statement as
to the situation of its registered office shall not be taken to satisfy the
obligation imposed by the provisions of this subsection.
(3) Where notice of the registered office has not been given under
the provisions of subsection (2) within fourteen days from the date
of incorporation of a company then the intended situation of such
company's registered office on incorporation, specified in the
statement delivered prior to the incorporation, shall be deemed to be
the registered office of the company.

fine.
194. (1) Every company—

Publication of
(a) shall paint or affix, and keep painted or affixed, its name on name by
company.
the outside of every office or place in which its business is
carried on, in a conspicuous position, in letters easily
legible;
(b) shall have its name engraven in legible characters on its seal;
(c) shall have its name specified in legible characters in all
business letters of the company and in all notices, and other
official publications of the company and in all bills of
exchange, promissory notes, endorsements, cheques and
orders for money or goods purporting to be signed by or on
behalf of the company, and in all bills of parcels, invoices,
receipts and letters of credit of the company.
(2) Where a company does not paint or affix its name in manner
directed by this Act, the company and every officer of the company
who is in default shall be guilty of an offence and shall be liable to
fine not exceeding two hundred and fifty rupees, and where a
company does not keep its name painted or affixed in manner so
directed the company and every officer of the company who is in
fine.
(3) Where a company fails to comply with the provisions of

paragraph (b) or paragraph (c) of subsection (1) the company shall
be guilty of an offence and. shall be liable to a fine not exceeding
five hundred rupees.
(4) Where an officer of a company or any person on its behalf—

(a) uses or authorizes the use of any seal purporting to be a
seal of the company whereon its name is not so
engraven as referred in subsection (1) ; or
(b) issues or authorizes the issue of business letters of the
company or any notice, or other official publication of
the company, or signs or authorizes to be signed on
behalf of the company any bill of exchange,
promissory note, endorsement, cheque, or order for
money or goods, wherein its name is not specified in
the manner referred to in subsection (1); or
(c) issues or authorizes the issue of any bill of parcels,
invoice, receipt, or letter of credit of the company,
wherein its name is not specified in the manner referred
to in subsection (1),
he shall be guilty of an offence and shall be liable to a fine not Statutory books,
&c., to be kept at
registered
exceeding five hundred rupees, and shall also be liable to the holder office .
of the bill of exchange, promissory note, cheque, or order for money
or goods, for the amount thereof, unless it is duly paid by the
company.
105. (1) Every register, book or other document declared by this

Act to be open to inspection by members of a company shall be kept
at the registered office of the company.
(2) Where default is made in complying with the provisions of this
section, the company and every officer of the company who is in
fine. Form of
registers, &c.
106. (1) Any register, index or book of account required by this
Act to be kept by a company may be kept either by making entries in
bound books, or by recording the matter in question in any other
manner.
(2) Regulations may be made in respect of the application of the
provisions of subsection (1) to any minute book required by this Act
to be kept by a company. In the absence of any such regulations,
such minute book shall be kept by making entries in a bound book,
and where it is
70 Companies Act, No 17 of 1982
not so kept, the company and every officer of the company who is
in. default shall be guilty of an offence and shall be liable to a fine
not exceeding five hundred rupees and also to a default fine.
(3) Where any such register, index or other book to which the
provisions of subsection (1) apply is not kept by making entries in a
bound book, but by some other means, adequate precautions shall be
taken for guarding against falsification and facilitating its discovery,
and where default is made in complying with the provisions of this
subsection, the company and every officer of the company who is in
exceeding five hundred rupees and also to a default fine.
RESTRICTIONS ON COMMENCEMENT OF BUSINESS
Restriction on
107. (1) Where a company having a share capital has issued a
commencement of
prospectus inviting the public to subscribe for its shares, the business.
company shall not commence any business or exercise any

borrowing powers unless—
(a) shares held subject to the payment of the whole amount
thereof in cash have been allotted to an amount not less in the whole
than, the minimum subscription; and
(b) every director of the company has paid to the company on
each of the shares taken or contracted to be taken by him and for
which he is liable to pay in cash, a proportion equal to the proportion
payable on application and allotment on the shares offered for public
subscription; and
(c) there has been delivered to the Registrar for registration a
statutory declaration by the secretary or one of the directors, in the
prescribed form, that the provisions of paragraphs, (a) and (b) have
been complied with.
(2) Where a company having a share capital has not issued a

prospectus inviting the public to subscribe for its shares, the
company shall not commence any business or exercise any
borrowing powers, unless—
(a) there has been delivered to the Registrar for registration a
statement in lieu of prospectus;
(b) every director of the company has paid to the company, on

each of the shares taken or contracted to be taken by him and for
which he is liable to pay in cash, a proportion equal to the proportion
payable on application and allotment on the shares payable in cash ;
and
(c) there has been delivered to the Registrar for registration a
statutory declaration by the secretary or one of the directors in the
prescribed form that the provisions of paragraph (b) have been
complied with.
(3) The Registrar shall, on the delivery to him of the statutory

declaration under the provisions of paragraph (c) of subsection (2),
and, in the case of a company which is required by this section to
deliver a statement in lieu of prospectus, of such a statement, certify
that the company is entitled to commence business, and that
certificate shall be conclusive evidence that the company is so
entitled.
(4) Any contract made by a company before the date on which it

is entitled to commence business shall be provisional, and shall not
be binding on the company until such date.
(5) Nothing in this section shall prevent the simultaneous offer

for subscription or allotment of any shares and debentures or the
receipt of any money payable on application for debentures.
(6) Where any company commences business or exercises

borrowing powers in contravention of the provisions of this section,
every person who is responsible for the contravention shall, without
prejudice to any other liability, be guilty of an offence and shall be
liable to a fine not exceeding five hundred rupees for every day
during which the contravention continues.
(7) Nothing in this section shall apply to—

(a) a private company ; or
(b) a company registered before April 1, 1939.
REGISTER OF MEMBERS
Register of
108. (1) Every company shall keep in one or more books a members
register of its members, and enter in such book or books the

following particulars:—
(a) the names and addresses, nationalities and the principal
occupations, if any, of the members, and in the case of a
company having a share capital a statement of the shares
held by each member, distinguishing each share by its
number, and of the amount paid or agreed to be
considered as paid on the shares of each member;
(b) the date on which each person was entered in the
register as a member;
(c) the date on which any person ceased to be a member :
Provided that, where the company has converted any of its

shares into stock and given notice of the conversion to the Registrar,
the register shall show the amount or stock held by each member
instead of the amount of shares and the particulars relating to shares
specified in paragraph (a).

default shall be guilty of an offence, and shall be liable to a default
fine.
109. (1) Every company having more than fifty members shall, Index of
members of
company.
unless the register of members is in such a form as to constitute in
itself an index, keep an index of the names of the members of the
company and shall, within fourteen days from the date on which any
alteration is made in the register of members, make any necessary
alteration in the index.
(2) The index shall in respect of each member contain a

sufficient indication enabling the account of that member in the
register to be readily found.

this section, the company and every officer to the company who is in
fine.
110. (1) On the issue of a share warrant the company shall strike Provisions as
to entries in
register in
out of its register of members the name of the member then entered relation, to
share warrants.
therein as holding the shares specified in. the warrant as if he had
ceased to be a member, and. shall enter in the register the following
particulars, namely:—
(a) the fact of the issue of the warrant;
(b) a statement of the shares included in the warrant
distinguishing each share by its number ; and
(c) the date of the issue of the warrant.
(2) The bearer of a share warrant shall, subject to the articles of

the company, be entitled, on surrendering it for cancellation, to have
his name entered as a member in the register of members.
(3) The company shall be responsible for any loss incurred by

any person by reason of the company entering in the register the
name of a bearer of a share warrant in respect of the shares therein
specified without the warrant being surrendered and cancelled.
(4) Until the warrant is surrendered, the particulars specified in

subsection (1) shall be deemed to be the particulars required by
this Act to be entered in the registers of members, and on the
surrender, the date of the surrender shall be entered.
(5) Subject to the provisions of this Act, the bearer of a share

warrant may, if the articles of the company so provide, be deemed
to be a member of the company within the meaning of this Act,
either to the full extent of, or for any purposes defined in, the
articles.
Inspection of register
111. (1) The register of members, commencing from the date and
index.
of the registration of the company and the index of the names of
members shall, except when duly closed (but subject to such
reasonable restrictions as the company may in general meeting
impose, so that not less than two hours in each day shall be
allowed for inspection), be open to the inspection of any member
without charge and of any other persons on payment of one rupee
or such less sum as the company may specify for each inspection.
(2) Any member or other person may require a copy of the

register, or of any part thereof, on payment of such sum not
exceeding one rupee as the company may specify, for every
hundred words or fractional part thereof required to be copied.
The company shall cause any copy so required by any person to be
sent to that person within a period of ten days commencing on the
day next after the day on which the requirement is received by the
company.
(3) Where any inspection required under the provisions of this

section is refused or if any copy required under the provisions of
this section is not sent within the proper period, the company and
every officer of the company who is in default shall be guilty of an
offence and shall be liable in respect of each offence to a fine not
exceeding one thousand rupees and further to a default fine of two
hundred and fifty rupees for every day during which the default
continues.
(4) In the case of any such refusal or default, the court may by
order compel an immediate inspection of the register and index or
direct that the copies required shall be sent to the persons requiring
them.
Power to
112. A company may, after notice published in the Gazette and in close register
any newspaper circulating in the district in which the registered

office of the company is situate, close the register of members for
any time or times not exceeding in the whole thirty days in each
year.
Power of court to
113. (1) Where— rectify register
(a) the name of any person is, without sufficient cause, entered in
or omitted from the register of members of a company; or
(b) default is made or unnecessary delay takes place in entering
on the register the fact of any person having ceased to be a
member, the person aggrieved, or any member of the
company, or the company, may make an application to
court for rectification of the register.
(2) Where an application is made under the provisions of this

section, the court may either refuse the application or may order
rectification of the register and payment by the company of any
damages sustained by any party agreed.
(3) On an application made under the provisions of this section,

the court may decide any question relating to the title of any person
who is a party to the application to have his name entered in or
omitted from the register, whether the question arises between
members, or alleged members, or between members or alleged
members on the one hand and the company on the other hand, and
generally may decide any question necessary or expedient to be
decided for rectification of the register.
(4) In the case of a company required by this Act to send a list of
its members to the Registrar, the court, when making an order for
rectification of the register under the provisions of subsection (2)
shall by its order direct notice of the rectification to be given to the
Registrar.
Trusts not to be
114. Subject to the provisions of paragraph (b) of the proviso to entered on
register.
section 55(1), no notice of any trust, expressed, implied, or
constructive, shall be entered on the register, or be receivable by the
Registrar, in the case of companies registered in Sri Lanka.
Register to be
evidence.
115. The register of members shall be prima facie evidence of
any matters by this Act directed or authorized to be inserted therein.
BRANCH REGISTER
Power of
116. (1) A company having a share capital may, if so authorized company to
keep branch
register.
by its articles, cause to be kept in any country other than Sri Lanka a
branch register of members resident register in that country (in this
Act called "branch register").
(2) The company shall give to the Registrar notice of the

situation of the office where any branch register is kept and of any
change in its situation, and if it is discontinued, notice of its
discontinuance, and any such notice shall be given within one month
from the date of opening of the office or of change or
discontinuance, as the case may be.

subsection (2), the company and every officer of the company who
is in default shall be liable to a default fine.
Regulations as to
117. (1) A branch register shall be deemed to be part of the branch register.
company's register of members (in this section called "the principal

register").
(2) It shall be kept in the same manner in which the principal

register is by this Act required to be kept, except that the
advertisement before closing the register shall be inserted in any
newspaper circulating in the district where the branch register is
kept.
(3) The company shall transmit to its registered office in Sri

Lanka a copy of every entry In its branch register as soon as may be
after the entry is made, and shall cause to be kept at its registered
office, duly brought up to date from time to time, a duplicate of its
branch register.
Every such duplicate shall, for all the purposes of

this Act, be deemed to be part of the principal register.
(4) Subject to the provisions of this section with

respect to the duplicate register, the shares registered
in a branch register shall be distinguished from the
shares registered in the principal register, and no
transaction with respect to any shares registered in a
branch register shall, during the continuance of that
registration, be registered in any other register.
(5) A company may discontinue to keep a branch register,
and thereupon all entries in that register shall be transferred to the
principal register.
(6) Subject to the provisions of this Act, any

company may, by its articles, make such provisions as
it may think fit respecting the keeping of branch
registers.
(7) Where default is made in complying with the

provisions of subsection (3), the company and every
officer of the company who is in default shall be liable
to a default fine.
Stamp duties in
118. An instrument of transfer of a share registered case of shares
registered in
branch register.
in a branch register, shall be deemed to be a transfer of
property situate out of Sri Lanka, and, unless executed
in Sri Lanka, shall be exempt from stamp duty
chargeable in Sri Lanka.
Provisions as to
branch registers
119. Where by virtue of the law in force, in any kept in any other
country.
other country, companies incorporated under that law
have power to keep in Sri Lanka branch registers of
their members resident in Sri Lanka, the Minister may
by Order published in the Gazette direct that sections
111 and 113 of this Act, shall, subject to any
modifications and adaptations specified in the Order,
apply to and in relation to any such branch registers
kept in Sri Lanka as they apply to and in relation to the
registers of companies within the meaning of this. Act.
ANNUAL RETURN
Annual return to
120. (1) Every company having a share capital shall be made by
company having
once at least in every year make a return containing a a share capital
list (of all persons who, on the fourteenth day from the
date of the first or only ordinary general meeting in the
year, are members of the company, and all persons
who have ceased to be members since the date of the
last return or, in that case of the first return, of the
incorporation of the company :
Provided that the preceding provisions of this

section shall not apply to a company either in the year
of its incorporation or, if it is not required under the
provisions of section 127 to hold an annual general
meeting during the following year, in that year.
(2) The list referred to in subsection (1) shall state the names,
addresses, nationalities and principal occupations of all the past
and present members therein mentioned, and the number of
shares held by each of the existing members at the date of the
return, specifying shares transferred since the date of the last
return or, in the case of the first return, of the incorporation of the
company by persons who are still members and have ceased to be
members respectively and the dates of registration of the
transfers, and, if the names contained in such list are not arranged
in alphabetical order, shall have annexed to it an index sufficient
to enable the name of any person, in such list to be readily
found :
Provided that, where the company has converted any

of its shares into stock and given notice of the
conversion to the Registrar, the list shall state the
amount of stock held by each of the existing members
instead of the amount of shares and the particulars
relating to shares referred to in the preceding
provisions of this section.
(3) The return made under the provisions of

subsection (1) shall also state the date of
incorporation, and change of name (if any), of the
company and the address of the registered office of the
company and shall contain a summary distinguishing
between shares issued for cash and shares issued as
fully or partly paid up otherwise than in cash, and
specifying the following particulars: —
(a) the amount of the share capital of the company,
and the number of the shares into which it is
divided ;
(b) the number of shares taken from the date of
commencement of business of the company up
to the date of the return ;
(c) the amount called upon each share;
(d) the total amount of calls received;
(e) the total amount of calls unpaid;
(f) the total amount of the sums, if any, paid by way
of commission in respect of any shares or
debentures ;
(g) particulars of the discount allowed on the issue of
any shares issued at a discount, or of so much
of that discount as has not been written off at
the date on which the return is made ;
(h) the total amount of the sums, if any, allowed by

way of discount in respect of any debentures,
since the date of the last return ;
(i) the total number of shares forfeited ;
(j) the total amount of shares for which share
warrants are outstanding at the date of the
return ;
(k) the total amount of share warrants issued and
surrendered respectively since the date of the
last return;
(l) the number of shares comprised in each share
warrant;
(m) all such particulars with respect to the persons
who at the date of the return are the directors
of the company as are by this Act required to
be contained with respect to directors in the
register of the directors of a company;
(n) the total amount of the indebtedness of the
company in respect of all mortgages and
charges which are required to be registered
with the Registrar under this Act;
(o) the name and address of the auditor, or the
names and addresses of the auditors, of the
company at the date of the return.
(4) The return made under the provisions of

subsection (1) shall be in accordance with the form set
out in the Sixth Schedule hereto or as near thereto as
(5) Where a company fails to comply with the

provisions of this section, the company and every
officer of the company who is in default shall be guilty
of an offence and shall be liable to a default fine.
(6) For the purposes of this section and of the Sixth
Schedule hereto, the expressions "director” and
"officer" shall include any person in accordance with
whose directions or instructions the directors of the
company are accustomed to act.
121. (1) Every company not having a share capital shall at Annual return
to be made by
company not
least once in every calendar year make a return stating— having share
capital.
(a) the address of the registered office of the company;
(b) all such particulars with respect to the persons who at the
date of the return are the directors of the company as are
by this Act required to be contained with respect to
directors in the register of directors of a company:
Provided that the preceding provisions of this section shall not apply to a
company either in the year of its incorporation or, if it is not required under
the provisions of section 127 to hold an annual general meeting during the
following year, in that year.
(2) There shall be annexed to any return made under the

provisions of subsection (1), a statement containing particulars of
the total amount of the indebtedness of the company in respect of
all mortgages and charges which are required to be registered
with the Registrar under this Act.

this section, the company and every officer of the company who
is in default shall be guilty of an offence and shall be liable to a
default fine.
Declaration
to be sent by
private
(4) For the purposes of this section, the expressions "officer" company
with
and "director" shall include any person in accordance with whose annual
return.
directions or instructions the directors of the company are
accustomed to act.
Time for
completion
122. A private company shall send with its annual return, a of annual
return.
declaration signed by the directors of the company to the effect
that to the best of their knowledge and belief they have done all
things required to be done by them by or under this Act.
123. (l) The annual return shall be completed within forty-two
days from, the date of the annual general meeting for the year,
whether or not that meeting is the first or only ordinary general
meeting, or the first or only general meeting, of the company in
the year, and the company shall forthwith forward to the
Registrar a copy of such return signed both by a director and by
the secretary of the company.
(2) Where a company fails to comply with this section, the

company and every officer of the company who is in default
shall be guilty of an offence and shall be liable to a default fine.
For the purposes of this subsection, the expression "officer"

shall include any person in accordance with whose directions or
instructions the directors of the company are accustomed to act.
Documents to be
annexed to
annual return.
124. (1) Subject to the provisions of this Act, there shall be
annexed to the annual return—
(a) a written copy, certified both by a director and by the
secretary of the company to be a true copy of every
balance sheet which was, or should have been, in
accordance with the provisions of section 144, laid
before the company at the general meeting subsequent to
which the annual return is required by the provisions of
subsection (1) of section 123 to be made (including every
document required by law to be annexed to the balance
sheet) ; and
(b) a copy, certified as aforesaid, of the report of the auditors,
on, and of the report of the directors accompanying, each
such balance sheet,
and where any such balance sheet or document required by law
to be annexed thereto is in a language other than the official
language or English, there shall be annexed to that balance sheet
a translation of the balance sheet or document in such language
as may be required by the Registrar and certified in the
prescribed manner to be a correct translation.
(2) Where any balance sheet or document required by law to

be annexed to such balance sheet does not comply with the
requirements of the law as in force at the date of the audit with
respect to form, there shall be made such additions to and
corrections in the copy referred to in paragraph (a) of subsection
(1) as would have been required to be made in the balance sheet
or document in order to make it comply with the said
requirements and the fact that the copy has been so amended
shall be stated thereon.

default fine.
For the purposes of this subsection, the expression "officer"

Certificates
instructions the directors of the company are accustomed to act. to be sent
by private
company
with
annual
125. A private company shall send to the Registrar together return.
with the annual return required to be sent under the provisions of

section 120, a certificate signed by a director and by the secretary
of the company that the company has not, since the date of the
last return, or, in the case of a first return, since the date of the
incorporation of the company, issued any invitation to the public
to subscribe for any shares or debentures of the company, and,
where the annual return discloses the fact that the number of
members of the company exceeds fifty, also a certificate so
signed that the excess consists wholly of persons who, under the
provisions of paragraph (b) of subsection (1) of section 30 are
not to be included in reckoning the number of fifty.
MEETINGS AND PROCEEDINGS
Statutory
126. (1) Every company limited by shares and every company
meeting and
limited by guarantee and having a share capital shall, within a period statutory
report
of not less than one month and not more than three months from the
date on which the company is entitled to commence business, hold a
general meeting of the members of the company, in this Act referred
as the “statutory meeting ".
(2) The directors shall, at least fourteen days before the day on
which the statutory meeting is held, forward a report, in this Act
referred to as the "statutory report", to every member of the company
:
Provided that, if the statutory report is forwarded later than is

required by the provisions of this subsection, it shall,
notwithstanding that fact, be deemed to have been duly forwarded if
it is so agreed by all the members entitled to attend and vote at the
meeting.
8—A 63752 (82/06)

(3) The statutory report shall be certified by not less

than two directors of the company, or, where there are
less than two directors, by the sole director and secretary
and shall state—
(a) the total number of shares allotted, distinguishing
shares allotted as fully or partly paid up otherwise than in
cash, and stating in the case of shares partly paid up the
extent to which they are so paid up, and in either case the
consideration for which they have been allotted;
(b) the total amount of cash received by the company
in respect of all the shares allotted, distinguished as set
out in paragraph (a) ;
(c) an abstract of the receipts of the company and of
the payments made thereout, up to a date within seven
days of the date of the report, exhibiting under distinctive
headings the receipts of the company from shares and
debentures and other sources, the payments made
thereout, and particulars concerning the balance
remaining in hand, and an account or estimate of the
preliminary expenses of the company ;
(d) the names, addresses, and descriptions of the
directors, auditors, if any, managers, if any, and secretary
of the company ; and
(e) the particulars of any contract, the modification of
which is to be submitted to the meeting for its approval,
together with the particulars of the modification or
proposed modification.
(4) The statutory report shall, so far as it relates to the

shares allotted by the company, to the cash received in
respect of such shares, and to the receipts and payments
of the company on capital account, be certified as correct
by the auditors, if any, of the company.
(5) The directors shall cause a copy of the statutory re-
port, certified as set out in the provisions of subsection
(4) to be delivered to the Registrar for registration
forthwith after the sending thereof to the members of the
company.
(6) The directors shall cause a list showing the names,

descriptions and addresses of the members of the
company, and the number of shares held by them
respectively, to be
produced at the commencement of the meeting, and to re-

main open and accessible to any member of the company
during the continuance of the meeting.
(7) The members of the company present at the

meeting shall be at liberty to discuss any matter relating
to the formation of the company, or arising out of the
statutory report, whether previous notice has been given
or not, but no resolution of which notice has not been
given in accordance with the articles may be passed.
(8) The meeting may adjourn from time to time, and at

any adjourned meeting any resolution of which notice has
been given in accordance with the articles either before or
subsequently to the former meeting, may be passed, and
the adjourned meeting shall have the same powers as an
original meeting.
(9) In the event of any default in complying with the

provisions of this section, every director of the company
who is knowingly and wilfully guilty of the default or, in
the case of default by the company, every officer of the
company who is in default shall be guilty of an offence
and shall be liable to a fine not exceeding five hundred
rupees.
(10) The provisions of this section shall not apply to a

private company.
127. (1) Every company shall in each year hold a Annual general
meeting
general meeting called its annual general meeting in
addition to any other meetings in that year and shall
specify the meeting as such in the notice calling it; and
not more than fifteen months shall elapse between the
date of one annual general meeting of a company and that
of the next:
Provided that, so long as a company holds its first

annual general meeting within eighteen months of its
incorporation it need not hold it in the year of its
incorporation or in the following year.
(2) Where default is made in holding a meeting of the

company in accordance with the provisions of subsection
(1) the Registrar may, on the application of any member
of the company call, or direct the calling of, a general
meeting of the company and give such ancillary or
consequential directions as the Registrar thinks expedient,
including any direction modifying or supplementing, in
relation to the calling, holding and conducting of the
meeting, the operation
of the company's articles, and a direction to the effect

that one member of the company present in person or by
proxy shall be deemed to constitute a meeting.
(3) A general meeting held in pursuance of the

provisions of subsection (2) shall, subject to any
directions of the Registrar, be deemed to be an annual
general meeting of the company ; but, where a meeting so
held is not held in the year in which the default in holding
the company's annual general meeting occurred, the
meeting so held shall not be treated as the annual general
meeting for the year in which it is held unless at that
meeting the company resolves that it shall be so treated.
(4) Where a company resolves that a meeting shall be

so treated, a copy of the resolution shall, within fifteen
days from the date of passing thereof, be forwarded to the
Registrar and recorded by him.
(5) Where default is made in holding a meeting of the

company in accordance with the provisions of subsection
(1), or in complying with any directions of the Registrar
under the provisions of subsection (2), the company and
every officer of the company who is in default shall be
guilty of an offence and shall be liable to a fine not
exceeding five hundred rupees, and where default is made
in complying with the provisions of subsection (4), the
company and every officer of the company who is in
default shall be guilty of an offence and shall be liable to
a fine of two hundred and fifty rupees.
Convening of
128. (I) The directors of a company, notwithstanding extraordinary general
meeting on requisition.
anything in its articles, shall, on the requisition of
members of the company holding at the date of the
deposit of the requisition not less than one-tenth of such
of the paid-up capital of the company as at the date of the
deposit carries the right of voting at general meetings of
the company, or, in the case of a company not having a
share capital, members of the company representing not
less than one-tenth of the total voting rights of all the
members having at the said date a right to vote at general
meetings of the company, forthwith proceed duly to
convene an extraordinary general meeting of the
company.
(2) The requisition shall state the objects of the

meeting, and shall be signed by the requisitionists and
deposited at the registered office of the company, and
may consist of several documents in like form, each
signed by one or more requisitionists.

(3) Where the directors do not within twenty-one days
from the date of the deposit of the requisition duly
proceed to convene a meeting, the requisitionists, or any
of them representing more than one-half of the total
voting rights of all of them may themselves convene a
meeting, but any meeting so convened shall not be held
after the expiration of three months from the said date.
(4) A meeting convened under the provisions of this sec-

tion by the requisitionists shall be convened in the same
manner as nearly as possible, as that in which meetings are
to be convened by the directors.
(5) Any reasonable expenses incurred by the

requisitionists by reason of the failure of the directors duly
to convene a meeting shall be repaid to the requisitionists by
the company, and any sum so repaid shall be retained by the
company out of any sums due or to become due from the
company by way of fees or other remuneration in respect of
their services to such of the directors as were in default.
(6) For the purposes of this section, the directors shall, in

the case of a meeting at which a resolution is to be proposed
as a special resolution, be deemed not to have duly convened
the meeting if they do not give such notice thereof as is re-
quired by the provisions of section 137.
129. (1) Any provision of a company's articles shall be void Length of notice for
calling meetings.
in so far as it provides for the calling of a meeting of the
company (other than an adjourned meeting) by a shorter
notice than—
(a) in the case of the annual general meeting,

twenty-one days' notice in writing in the
case of a company other than a private
company, and fourteen days' notice in
writing in the case of a private company
and
(b) in the case of a meeting other than an

annual general meeting or a meeting for
the passing of a special resolution,
fourteen days' notice in writing in the case
of a company other than a private or an
unlimited company and ten days' notice in
writing in the case of a private or an
unlimited company.

(2) Subject to the provisions of subsection (1), save in
so far as the articles of a company make other provisions in
that behalf, a meeting of the company (other than an
adjourned meeting) may be called—
(a) in the case of the annual general meeting by twenty-

one days' notice in writing in the case of a
company other than a private company, and by
fourteen days' notice in writing in the case of a
private company ; and
(b) in the case of a meeting, other than an annual general

meeting or an meeting for the passing of a special
resolution, by fourteen days' notice in writing in
the case of a company other than a private or an
unlimited company and by ten days' notice in
writing in the case of a private or an unlimited
company.
3) A meeting of the company shall, notwithstanding

that it is called by shorter notice than that specified in the
last foregoing subsection or in the company's articles, as the
case may be, be deemed to have been duly called if it is so
agreed—
(a) in the case of a meeting called as the annual
general meeting, by all the members entitled
to attend and vote at such meeting ; and
(b) in the case of any other meeting, by the members

having a right to attend and vote at the
meeting, being members together holding not
less than ninety-five per centum in nominal
value of the shares giving a right to attend
and vote at the meeting, or, in the case of a
company not having a share capital, together
representing not less than ninety-five per
centum of the total voting rights at that
meeting of all the members.
Provisions as to
130. The following provisions shall have effect in so far meetings and
votes.
as the articles of the company do not make other
provision in that behalf—
(a) notice of the meeting of a company shall be

served on every member of the company in
the manner in which notices are required to
be served under the provisions of Table A of
the First Schedule hereto and for the purpose
of this paragraph, the expression " Table A "
means that Table as is for the time being in
force ;

(b) two or more members holding not less than one-tenth of
the issued share capital or, if the company has not a
share capital, not less than five per centum in number of
the members of the company may call a meeting ;
(c) in the case of a private company two members, and in

the case of any other company three members, present in
person or by an authorized representative under the
provisions of paragraph (a) of subsection (1) of section
132 shall be a quorum ;
(d) any member elected by the members present at a

meeting may be chairman thereof ;
(e) no member shall be entitled to vote at any

general meeting unless all calls or other sums then
payable by him in respect of shares in the company have
been paid ;
(f) in the case of a company having a share capital where

voting is by show of hands, each member shall have one
vote and on a poll every member shall have one vote in
respect of each share or each one hundred rupees of
stock, as the case may be, held by him and in any other
case every member shall have one vote.
Power of Court to
131. (1)Where for any reason it is impracticable to call a order meeting
meeting of a company in any manner in which meetings of

that company may be called, or to conduct the meeting of the
company in the manner specified by the articles or this Act,
the court may either of its own motion or on the application
of any director of the company or of any member of the
company who would be entitled to vote at the meeting, order
a meeting of the company to be called, held and conducted in,
such manner as the court thinks fit, and where any such order
is made, may give such ancillary or consequential direction,
as it thinks expedient, and any meeting called, held and
conducted in accordance with any such order shall for all
purposes be deemed to be a meeting of the company duly
called, held and conducted and any such direction may
include a direction that one member of the company present
in person or by proxy shall be deemed to constitute a
meeting.
(2) A copy of every notice calling a meeting

under the provisions of this section shall be sent to the
Registrar at the same time as such notice is required to be
sent to the members.
provisions of subsection (2) the company and every
officer of the company who is in default shall be
exceeding two hundred and fifty rupees.
Representation of
132 (1) A corporation, whether a company within the companies at
meetings of
other
meaning of this companies and
of creditors
Act or not, may-
(a) Where it is a member of another

corporation, being a company within
the meaning of this Act, by resolution
of directors or other governing body
authorize such person as it thinks fit
to act as its representative at any
meeting of the company or at any
meeting of any class of members of
the company;
(b) Where it is a creditor (including a

holder of debentures) of another
corporation, being a company within
the meaning of this Act, by resolution
of its directors or other governing
body authorize such person as it
thinks fit to act as representative at
any meeting of any creditors of the
company held in pursuance of this
Act or any rules made thereunder, or
in pursuance of the provisions
contained in any debenture or trust
deed, as the case may be.
(2) A person authorized as aforesaid shall be
entitle to exercise the same power on behalf of the
corporation which be represents as that corporation could
exercise if it were an individual shareholder, creditor or
holder of debentures of that other company.
Proxies
133 (1) Any member of a company entitled to attend
and vote at a meeting of the company shall be entitled to
appoint another person (whether a member or not) as his
proxy to attend and vote instead of him, but a proxy so
appointed shall not have the same right as the same right as
the member to speak at the meeting unless expressly
authorized in that behalf by the instrument appointing his as
proxy;
Provided that, unless the articles otherwise

provide;-
(a) the provisions of this subsection shall
not apply in the case of a company
not having a share capital; and

(b) a member shall not be entitled to appoint more than one
proxy to attend on the same occasion ; and
(c) a proxy shall not be entitled to vote except on a poll.
(2) In every notice calling a meeting of a company

having a share capital there shall appear with reasonable
prominence a statement that a member entitled to attend and
vote is entitled to appoint a proxy to attend and vote instead
of him, and that a proxy need not also be a member ; and
where default is made in complying with the provisions of
this subsection as respects any meeting every officer of the
company who is in default shall be guilty of an offence and
(3) Any provision contained in a company's articles shall

be void in so far as it would have the effect of requiring the
instrument appointing a proxy, or any other document neces-
sary to show the validity of or otherwise relating to the
appointment of a proxy, to be received by the company or
any other person more than forty-eight hours and not less
than twenty-four hours before a meeting or adjourned meet-
ing in order that the appointment may be effective thereat.
(4) Where for the purpose of any meeting of a company

invitations to appoint as proxy a person or one of a number
of persons specified in the invitations are issued at the com-
pany's expense to some only of the members entitled to be
sent a notice of the meeting and to vote thereat by proxy,
every officer of the company who knowingly and willfully
authorizes or permits their issue as aforesaid shall be guilty
of an offence and shall be liable to a fine not exceeding one
thousand rupees:
Provided that an officer shall not be liable under the

provisions of this subsection by reason only of the issue to a
member at his request in writing of a form of appointment
naming the proxy or of a list of persons willing to act as
proxy if the form or list is available on request in writing to
every member entitled to vote at the meeting by proxy.
(5) The provisions of this section shall apply to meetings

of any class of members of a company as it applies to
general meetings of the company.
(6) Every member of the company or a proxy holder
shall be entitled to inspect the proxies received under the
provisions of this section at least three hours before the
commencement of the meeting or adjourned meeting at
which the proxy is to be used.
134. (1) Any provision contained in a company's Right to demand a

poll
articles shall be
void in so far as it would have the effect
either—
(a) of excluding the right to demand a poll at a

general meeting on any question other than
the election of the chairman of the meeting or
the adjournment of the meeting; or
(b) of making ineffective a demand for a poll on

any such question which is made either—
(i) by not less than five members having the
right to vote at the meeting; or
(ii) by a member or members representing not
less than one-tenth of the total voting rights
of all the members having the right to vote at
the meeting; or
(iii) by a member or members holding shares in
the company conferring a right to vote at the
meeting, being shares on which an aggregate
sum has been paid up equal to not less than
one-tenth of the total sum paid up on all the
shares conferring that right.
(2) The instrument appointing a proxy to vote at a
meeting of a company shall be deemed also to confer autho-
rity to demand or join in demanding a poll, and for the pur-
poses of the provisions of subsection (1) a demand by a
person as proxy for a member shall be the same as a demand
by the member.
135. On a poll taken at a meeting of a company or Voting on a poll.
a meeting of any class of members of a company, a

member entitled to more than one vote need not, if
he votes, use or cast all his votes in the same way.
Circulation of
members;
136. (1) It shall be the duty of a company, on resolutions on
requisition
the requisition in writing of such number of members as is
hereinafter specified and (unless the company otherwise
resolves) at the expense of the requisitionists—
(a) to give to members of the company

entitled to receive notice of the next
annual general meeting notice of any
resolution which may properly be
moved and is intended to be moved at
that meeting;
(b) to circulate to members entitled to
have notice of any general meeting
sent to them any statement with
respect to the matter referred to in any
proposed resolution or the business to
be dealt with at that meeting.
(2) The number of members necessary for

a requisition under the provisions of subsection (1) shall be
—
(a) any number of members representing
not less than one-twentieth of the total
voting rights of all the members
having at the date of the requisition a
right to vote at the meeting to which
the requisition relates; or
(b) not less than fifty members holding
shares in the company on which there
has been paid up an average sum, per
member, of not less than one thousand
rupees.
(3) Notice of any such resolution shall be
given, and any such statement shall be circulated, to
members of the company entitled to have notice of the
meeting sent to them by serving a copy of the resolution or
statement on each such member in any manner permitted for
service of notice of the meeting, and notice of any such
resolution shall be given to any other member of the
company by giving notice of the general effect of the
resolution in any manner permitted for giving him notice of
meetings of the company:
Provided that the copy shall be served, or notice of the

effect of the resolution shall be given, as, the case may be, in
the same manner and as far as practicable at the same time
as notice of the meeting and, where it is not practicable for it
to be served or given at that time, it shall be served or given
as soon as practicable thereafter.
92 Companies Act, No.17 of
1982
(4) A company shall not be bound under
the provisions of this section to give notice of any resolution
or to circulate any statement unless—
(a) a copy of the requisition signed by the
requisitionists (or two or more copies which
between them contain the signatures of all the
requisitionists) is deposited at the registered
office of the company—
(i) in the case of a requisition requiring
notice of a resolution, not less than six
weeks before the date of the meeting ;
and
(ii) in the case of any other requisition, not

less than one week before the meeting;
and
(b) there is deposited or tendered with the requisition

a sum reasonably sufficient to meet the
company's expenses in giving effect thereto :
Provided that where, after a copy of a

requisition requiring notice of a resolution has
been deposited at the registered office of the
company, an annual general meeting is called for
a date six weeks or less from the date on which
the copy has been deposited, the copy though not
deposited within the time required by this
subsection shall be deemed to have been properly
deposited for the purposes thereof.
(5) The company shall not be bound

under the provisions of this section to circulate any
statement, if, on the application either of the company or of
any other person who claims to be aggrieved, the court is
satisfied that the rights conferred by the provisions of this
section are being abused to secure unnecessary publicity for
defamatory matter ; and the court may order the company's
costs on an application made under the provisions of this
section to be paid in whole or in part by the requisitionists,
notwithstanding that they are not parties to the application.
(6) Notwithstanding anything in the

company's articles, the business which may be dealt with at
an annual general meeting shall include any resolution of
which notice is given in accordance with the provisions of
this section, and for the purposes of this subsection notice
shall be deemed to have been so given notwithstanding the
accidental omission, of giving such notice to one or more
members.
(7) Where any default is made in
complying with the provisions of this section, every officer
of the company who is in default shall be guilty of an
offence and shall be liable to a fine not exceeding five
thousand rupees.
137. (1) A resolution shall be an extraordinary resolu- Provisions as to

extraordinary and
tion when it has been passed by not less than three-fourths of special
resolutions
such members as, being entitled so to do, vote in person or
where proxies are allowed, by proxy, or by an authorized
representative under the provisions of paragraph (a) of
subsection (1) of section 132, at a general meeting of which
notice specifying the intention to propose the resolution as
an extraordinary resolution has been duly given.
(2) A resolution shall be a special resolution

when it has been passed by such a majority as is required for
the passing of an extraordinary resolution and at a general
meeting of which not less than twenty-one days' notice, in
the case of a company other than a private company or,
fourteen days' notice in the case of a private company,
specifying the intention to propose the resolution as a special
resolution has been duly given:
Provided that, where it is so agreed by the members

having the right to attend and vote at any such meeting,
being members together holding not less than ninety-five
per centum in nominal value of the shares giving that right,
or, in the case of a company not having a share capital,
together representing not less than ninety-five per centum of
the total voting rights at that meeting of all the members, a
resolution may be proposed and passed as a special resolu-
tion at a meeting of which less than twenty-one days' notice
or fourteen days' notice, as the case may be, has been given.
(3) At any meeting at which an extraordinary

resolution or a special resolution is submitted to be passed, a
declaration of the chairman that the resolution is carried
shall, unless a poll is demanded, be conclusive evidence of
the fact without proof of the number or proportion of the
votes recorded in favour of or against the resolution.
(4) In computing the majority on a poll

demanded on the question that an extraordinary resolution or
a special resolution be passed, reference shall be had to the
number of votes cast for and against the resolution.
(5) For the purposes of this section, notice of a meeting

shall be deemed to be duly given and the meeting to be duly
held when the notice is given and the meeting held in
manner provided by the articles, or by this Act.
Resolutions
138. Where by any provision, hereafter contained requiring special
notice.
in this Act, special notice is required of a resolution, the
resolution shall not be effective unless notice of the intention
to move it has been given to the company not less than
twenty-eight days before the date of the meeting at which it
is moved, and the company shall give its members notice of
any such resolution at the same time and in the same manner
as it gives notice of the meeting or, if that is not practicable,
shall give them notice thereof, either by advertisement in a
newspaper having an appropriate circulation or in any other
manner allowed by the articles, not less than twenty-one
days before the date of the meeting :
Provided that where, after notice of the intention to

move such a resolution has been given to the company, a
meeting is called for a date twenty-eight days or less from
the date of the notice, the notice though not given within the
time required by this section shall be deemed to have been
properly given for the purposes thereof.
Registration of
139. (1) A copy of every resolution or agreement to certain resolutions
and agreements.
which this section applies shall within fifteen days after the
passing or making thereof, be forwarded to the Registrar and
recorded by him in the prescribed form.
(2) Where articles have been registered, a copy

of every such resolution or agreement for the time being in
force shall be embodied in or annexed to every copy of the
articles issued after the passing of the resolution or the
making of the agreement.
(3) Where articles have not been registered, a

printed copy of every such resolution or agreement shall be
forwarded to any member at his request, on payment of five
rupees or such less sum as the company may direct.
(4) The provisions of this section shall apply to—

(a) a special resolution ;
(b) an extraordinary resolution ;
(c) a resolution which has been agreed to
by all the members of a company, but
which, if not so agreed to, would not
have been effective for its purpose
unless, as the case may be, it has been
passed as a special resolution or as an
extraordinary resolution;
(d) a resolution or agreement which has

been agreed to by all the members of
some class of shareholders, but which,
if not so agreed to, would not have
been effective for their purpose unless
they had been passed by some
particular majority or otherwise in
some particular manner, and all
resolutions or agreements which
effectively bind all the members of
any class of shareholders though not
agreed to by all those members;
(e) a resolution requiring a company to
be wound up voluntarily, passed
under the provisions of paragraph (a)
of subsection (1) of section 308.

provisions of subsection (1), the company and every officer
offence and shall be liable to a fine of two hundred and fifty
rupees.

provisions of subsection (2) or subsection (3), the company
and every officer of the company who is in default shall be
exceeding two hundred and fifty rupees for each copy in
respect of which default is made.
(7) For the purposes of subsections (5) and (6), a
liquidator of the company appointed under this Act shall be
deemed to be an officer of the company.
140. Where after the appointed date a resolution Resolution passed

at adjourned
is passed at an adjourned meeting of — meetings
(a) a company;
(b) the holders of any class of shares in a
company ;
(c) the directors of a company,
the resolution shall for all purposes be treated

as having been passed on the date on which it
was in fact passed, and shall not be deemed
to have been passed on any earlier date.
141. (1) Every company shall cause minutes of all Minutes of

proceedings of
meetings and
proceedings of general meetings, meetings of its directors, directors.
and, where there are managers, meetings of its managers, to
be entered in books kept for that purpose.

(2) Any such minutes purporting to be signed by
the chairman of the meeting at which the proceedings were
had, or by the chairman of the next succeeding meeting,
shall be evidence of the proceedings.
(3) Where minutes have been made in

accordance with the provisions of this section of the
proceedings at any general meeting, or meeting of directors
or managers, as the case may be, of the company, then, until
the contrary is proved, the meeting shall be deemed to have
been duly held and convened, and all proceedings had
thereat to have been duly had, and all appointments of
directors, managers, or liquidators, made at the meeting shall
be deemed to be valid.

offence and shall .be liable to a default fine.
Inspection of
142. (1) The books containing the minutes of proceed- minute books.
ings of any general meeting of a company held after the

appointed date shall, during business hours (subject to such
reasonable restrictions as the company may by its articles or
in general meeting impose, so that not less than two hours in
each day be allowed for inspection) be open to inspection by
any member without charge.
(2) Any member shall be entitled to be furnished,

within seven days from the date on which he has made a
request in that behalf to the company, with a copy of any
such minutes referred to in subsection (1), at a charge not
exceeding one rupee for every hundred words.
(3) Where any inspection required under the

provisions of this section is refused or if any copy required
under the provisions of this section is not sent within the
specified period, the company and every officer of the
company who is in default shall be guilty of an offence and
shall be liable in respect of each offence to a fine not
exceeding two hundred and fifty rupees and further to a fine
of two hundred and fifty rupees.
(4) In the case of any such refusal or default, the

court may by order compel an immediate inspection of the
books in respect of all proceedings of general meetings or
direct that the copies required shall be sent to the persons
requiring them.

ACCOUNTS AND AUDIT
Keeping of books
of accounts.
143. (1) Every company shall cause to be kept proper
books of account
with respect to—
(a) all sums of money received and

expended by the company and the
matters in respect of which the receipt
and expenditure takes place ;
(b) all sales and purchases of goods by
the company;
(c) the assets and liabilities of the
company.
(2) For the purposes of the provisions of subsection (1),

proper books of accounts shall not be deemed to be kept
with respect to the matters set out in subsection (1) if there
are not kept such books as are necessary to give a true and
fair view of the state of the company's affairs and to explain
its transactions.
(3) The books of account shall be kept at the

registered office of the company or at such other place as the
directors think fit and shall at all times be open to inspection
by the directors, the Registrar or other officer duly
authorized in writing by the Registrar or by the auditors of
the company of any person duly authorized by the auditors
in writing:
Provided that, where books of account are kept at a place

outside Sri Lanka, there shall be sent to and kept at a place
in Sri Lanka and be at all times open to inspection by the
directors, such accounts and returns with respect to the
business dealt with in the books of account so kept as will
disclose with reasonable accuracy the financial position of
that business at intervals not exceeding six months and will
enable to be prepared in accordance with this Act the
company's balance sheet, its profit and loss account or
income and expenditure account, and any document annexed
to any of those documents giving information which is
required and permitted to be so given by this Act.
(4) Where any person being a director of a

company fails to take all reasonable steps to ensure
compliance by the company with the requirements of this
section, or has by his own wilful act been the cause of any
default by the company thereunder, he shall be guilty of an
offence and shall, in respect of each such offence, be liable
to a fine not
9—63752 (82/06)

exceeding two thousand rupees or to imprisonment of either
description for a term not exceeding six months or to both
such fine and imprisonment :
Provided that—
(a) in any proceedings against a person in respect of the
offence of contravention of the provisions of this
section by a failure to take reasonable steps to
secure compliance by the company with the
requirements of this section, it shall be a defence
to prove that such person had reasonable ground
to believe and did believe that a competent and
reliable person was charged with the duty of
seeing that those requirements were complied
with and was in a position to discharge that duty;
and
(b) a person shall not be sentenced to imprisonment for

such an offence unless, in the opinion of the
court dealing with the case, the offence was
committed wilfully.
144. (1) The directors of every company shall at a date Profit and loss
account and
not later than eighteen months from the date of incorporation balance sheet.
of the company and subsequently once at least in every

calendar year lay before the company at a general meeting, a
profit and loss account or, in the case of a company not
trading for profit, an income and expenditure account for the
period, in the case of the first account, since the incor-
poration of the company, and, in any other case, since the
preceding account, made up to a date not earlier than the
date of the meeting by more than nine months, or, in the
case of a company carrying on business or having interests
outside Sri Lanka, by more than twelve months:
Provided that the Registrar may, for sufficient cause

being shown by the defaulting company extend the periods
of eighteen, nine or twelve months, as the case may be,
aforesaid.
(2) The directors shall cause to be made out in every

calendar year, and to be laid before the company in general
meeting, a balance sheet as at the date to which the profit
and loss account or the income and expenditure account, as
the case may be, is made up.
(3) Where any person being a director of a company

fails to take all reasonable steps to comply with the
provisions of this section, he shall be guilty of an offence,
and shall, in respect of each offence, be liable to a fine not
exceeding.

two thousand rupees or to imprisonment of either description for a term
not exceeding six months or to both such fine and imprisonment:
Provided that—
(a) in any proceedings against a person in respect of
an offence under this section, it shall be a
defence to prove that such person had reason-
able ground to believe and did believe that a
competent and reliable person was charged
with the duty of seeing that the provisions of
this section were complied with and was in a
position to discharge that duty; and
(b) a person shall not be sentenced to imprisonment

for such an offence unless, in the opinion of
the court dealing with the case, the offence
was committed wilfully.
General
145. (1)Every balance sheet of a company shall give provisions as to
contents and
form of
a true and fair view of the state of affairs of the company as accounts
at the end of its financial year, and every profit and loss
account of a company shall give a true and fair view of the
profit or loss of the company for the financial year.
(2) A company's balance sheet and profit and
loss account shall comply with the requirements of the Fifth
Schedule hereto, so far as applicable thereto.
(3) Save as expressly provided in the following

provisions of this section or in Part III of the Fifth Schedule
hereto, the requirements of subsection (2) and such Schedule
shall be without prejudice either to the general requirements
of subsection (1) or to any other requirements of this Act.
(4) Notwithstanding the fact that any company

has failed to comply with any of the requirements of this Act
as to the matters to be stated in the company's balance sheet
or profit and loss account (except the requirements of
subsection (1)), the Registrar may, having regard to the paid-
up capital and turnover of the company, accept such balance
sheet or profit and loss account delivered to him by such
company, and accordingly such company shall, for the
purposes of this section, be deemed to have complied with
all such requirements.

(5) The provisions of subsections (1) and (2)
shall not apply to a company's profit and loss account where
—
(a) the company has subsidiaries ; and
(b) the profit and loss account is framed
as a consolidated profit and loss
account dealing with all or any of the
company's subsidiaries as well as the
company itself and—
(i) complies with the
requirements of this Act
relating to consolidated profit
and loss accounts; and
(ii) shows how much of the
consolidated profit or loss for
the financial year is dealt with
in the accounts of the
company.
(6) Where any balance sheet or profit and loss

account of a company, of which a copy is laid before the
company in general meeting or is delivered to the Registrar,
does not comply with the requirements of this section and
with the other requirements of this Act as to the matters to
be stated in the accounts, every person who, at the time
when the copy is so laid or delivered, is a director of the
company, shall be guilty of an offence and in respect of each
offence, shall be liable to a fine not exceeding two thousand
rupees :
Provided that, in proceedings against a person for the

offence of contravention of the provisions of this section, it
shall be a defence for such person to prove that he took all
reasonable steps for securing compliance with such
provisions.
(7) For the purposes of this section and the

following provisions of this Act, except where the context
otherwise requires-—
(a)any reference to a balance sheet or profit and loss

account shall include any notes thereon or
document annexed thereto, giving informa-
tion which is required and permitted to be so
given, by this Act; and

(b) any reference to a profit and loss account shall be
taken, in the case of a company not trading for profit, as
referring to its income and expenditure account, and any
reference to profit or to loss and, where the company has
subsidiaries, any reference to a consolidated profit and loss
account shall be construed accordingly.
146. (1)At the end of the financial year of a company Obligation to

lay group
having subsidiaries, accounts and statements (in this Act accounts before
holding
referred to as “group accounts") dealing as hereinafter set out company.
with the state of affairs and profit or loss of the company

and the subsidiaries, shall, subject to the provisions of
subsection (2), be laid before the company at a general
meeting when the own balance sheet and profit and loss
account of the company are so laid:
Provided that such group accounts may not deal with any
subsidiary of the company with respect to which the
directors of the company are of any of the opinions referred
to in sub-paragraphs (i), (ii) and (iii) of paragraph (b) of
subsection (2).
(2) Notwithstanding the provisions of subsection

(1), group accounts shall not be required—
(a) where the company is, at the end of its
financial year, the wholly-owned
subsidiary of another body corporate
incorporated in Sri Lanka ; and
(b) where the company's directors are of
opinion with respect to each of the
company's subsidiaries that─
(i) it is impracticable, or would
be of no real value to members
of the company, in view of the
insignificant amounts
involved, or would involve
expense or delay out of
proportion to the value to
members of the company ; or
(ii) the result would be
misleading, or harmful to the
business of. the company or
any of its subsidiaries ; or
(iii) the business of the holding
company and that of the
subsidiary are so different that
they cannot reasonably be
treated as a single
undertaking:
Provided that no company shall
refrain from dealing in group accounts
with a subsidiary on the ground that
the result would be harmful or on the
ground of the difference between the
business of the holding company and
that of the subsidiary, without the
prior approval in writing of the
Registrar.

company fails to take all reasonable steps to secure
compliance with the provisions of this section as respects the
company, he shall be guilty of an offence and shall, in
respect of each offence, be liable to a fine not exceeding two
thousand rupees or to imprisonment of either description for
a term not exceeding six months or to both such fine and
imprisonment:
Provided that—
(a) in any proceedings against a person in respect
of an offence under the provisions of this
section, it shall be a defence to prove that
he had reasonable ground to believe and
did believe that a competent and reliable
person was charged with the duty of
seeing that the requirements of this
section were complied with and was in a
position to discharge that duty;
and
(b) a person shall not be sentenced to

imprisonment for an offence under the
provisions of this section unless, in the
opinion of the court, the offence was
committed wilfully.
(4) For the purposes of this section, a body

corporate shall be deemed to be the wholly-owned
subsidiary of another if it has no members except that other
and that other's wholly-owned subsidiaries and its or their
nominees.
147. (1) Subject to the provisions of subsection (2), Form of group

accounts.
the group accounts
laid before a holding company shall be consolidated
accounts comprising—
(a) a consolidated balance sheet dealing

with the state of affairs of the
company and all the subsidiaries to be
dealt with in group accounts ; and
(b) a consolidated profit and loss account
dealing with the profit or loss of the
company and such subsidiaries.
(2) Where the company's directors are of opinion that it
is better for the purpose—
(a) of presenting the same or equivalent information

about the state of affairs and profit or loss of
the company and its subsidiaries; and
(b) of so presenting it that it may be readily appreciated
by the company's members,
the group accounts may be prepared in a form other

than that required by the provisions of subsection (1),
and in particular, may consist of more than one set of
consolidated accounts dealing respectively with the
company and one group of subsidiaries and with
other groups of subsidiaries or of separate accounts
dealing with each of the subsidiaries, or of
statements expending the information about the
subsidiaries in the company's own accounts, or any
combination of these forms.
(3) The group accounts may be wholly or partly

incorporated in the company's own balance sheet and profit
and loss account.
Content of group
148. (1) The group accounts laid before a company accounts
shall give a true and fair view of the state of affairs and
profit or loss of the company and the subsidiaries dealt with
thereby as a whole, so far as concerns members of the
company.
(2) Where the financial year of a subsidiary does

not coincide with that of the holding company, the group
accounts shall, unless the Registrar on the application, or
with the consent, of the directors of the holding company
otherwise directs, deal with the subsidiary's state of affairs
as at the end of its financial year ending with, or last before,
the financial year of the holding company, and with the
subsidiary's profit or loss for that financial year.
(3) Without prejudice to the provisions of

subsection (1) the group accounts, if prepared as
consolidated accounts, shall comply with the requirements
of the Fifth Schedule hereto, so far as applicable to
consolidated accounts and if not so prepared shall give the
same or equivalent information:
Provided that the Registrar may, on the application, or

with the consent, of the directors of a company, modify the
said requirements in relation to that company for the purpose
of adopting them to the circumstances of the company.
149. (1) The directors of a holding company shall Financial year
Financial year of holding
company and
of holding determine that except where in their opinion there are good subsidiary
company and
subsidiary. reasons against it, the financial year of each of its subsidi-
aries shall coincide with the company's own financial year.
(2) Where it appears to the Registrar desirable for a

holding company or a holding company's subsidiary to
extend its financial year so that the subsidiary's financial
year may end with the financial year of the holding
company, and for that purpose to postpone the submission of
the relevant accounts to a general meeting from one calendar
year to the next, the Registrar may, on the application, or
with the consent, of the directors of the company whose
financial year is to be extended direct that, in the case of that
company, the submission of accounts to a general meeting,
the holding of an annual general meeting or the making of
an annual return shall not be required in the earlier of the
said calendar years.
Meaning of
“holding
150. (1) For the purposes of this Act, a company company” and
“subsidiary”.
shall,' subject to the provisions of subsection (3), be deemed
to be a subsidiary of another if, and only if—
(a) that other company either—
(i) is a member of it and controls the composition of its

board of directors; or
(ii) holds more than half in nominal value of its equity
share capital; or
(b) the first-mentioned company is a subsidiary of any

company which is that other company's subsidiary.
(2) For the purposes of subsection (1), the composition
of a company's board of directors shall be deemed to be con-
trolled by another company if, and only if, that other
company by the exercise of any power exercisable by it
without the consent or concurrence of any other person can
appoint or remove the holders of all or a majority of the
directorships ; but for the purposes of these provisions that
other company shall be deemed to have power to appoint to
a directorship with respect to which any of the following
conditions is satisfied, that is to say—
(a)that a person cannot be appointed to a directorship

without the exercise in his favour by that
other company of a power to so appoint; or
(b) that a person's appointment to a directorship

follows necessarily from his appointment as
director of that other company ; or
(c) that the directorship is held by that other
company itself or by a subsidiary of it.
(3) In determining whether one company is a

subsidiary of another—
(a) any shares held or power exercisable by that

other in a fiduciary capacity shall be
treated as not held or exercisable by it;
(b) subject to the provisions of paragraphs (c)
and (d), any shares held or power
exercisable—
(i) by any person as a nominee
for that other (except where
that other is concerned only in
a fiduciary capacity) ; or
(ii) by, or by a nominee for, a
subsidiary of that other, not
being a Subsidiary which is
concerned only in a fiduciary
capacity, shall be treated as
held or exercisable by that
other ;
(c) any shares held or power exercisable by any

person by virtue of the provisions of any
debentures of the first-mentioned
company or of a trust deed for securing
any issue of such debentures shall be
disregarded;
(d) any shares held or power exercisable by, or
by a nominee for, that other or its
subsidiary (not being, held or exercisable
as referred to in paragraph (c)) shall be
treated as not held or exercisable by that
other if the ordinary business of that other
or its subsidiary, as the case may be,
includes the lending of money and the
shares are held or power is exercisable as
aforesaid by way of security only for the
purposes of a transaction entered into in
the ordinary course of that business.
(4) For the purposes of this Act, a company shall be

deemed to be another's holding company if, and only if, that
other is its subsidiary.
(5) In this section, the expression "company"

includes any body corporate, and the expression "equity
share capital" in relation to a company means its issued
share
capital excluding any part thereof which, neither as respects

dividends nor as respects capital, carries any right to parti-
cipate beyond a specified amount in a distribution.
Accounts and
151. (1)The profit and loss account and, so far as not auditor’s report to
be annexed to
balance sheet
incorporated in the balance sheet or profit and loss accounts,
any group accounts laid before the company at a general
meeting, shall be annexed to the balance sheet, and the
auditors' report shall be attached thereto.
(2) Any accounts so annexed shall be approved by the
board of directors before the balance sheet is signed on their
behalf.
(3) If any copy of a balance sheet is issued,

circulated or published without having annexed thereto a
copy of the profit and loss account or any group accounts
required by this section to be so annexed, or without having
attached thereto a copy of the auditors' report, the company
liable to a fine not exceeding five hundred rupees.
Directors’ report
to be attached to
152. (1) There shall be attached to every balance balance sheet.
sheet laid before a company in general meeting a report by

the directors with respect to the state of the company's
affairs, the amount, if any, which they recommend should be
paid by way of dividend, and the amount if any, which they
propose to carry to reserves within the meaning of the Fifth
Schedule hereto. The report shall state whether any director
is, directly or indirectly, interested in any contract or
proposed contract with the company, and if so shall state the
nature of such interest and whether it was declared by him at
a meeting of the directors as required under the provisions of
section 203.
(2) The report referred to in subsection (1) shall

deal, so far as is material for the appreciation of the state of
the company's affairs by its members and may not in the
opinion of the directors be harmful to the business of the
company or of any of its subsidiaries, with any change
during the financial year in the nature of the company's
business, or in the company's subsidiaries, or in the classes
of business in which the company has an interest, whether as
member of another company or otherwise.
company fails to take all reasonable steps to comply with the
requirements of subsection (1), he shall be guilty of an
offence and shall,
in respect of each offence, be liable to a fine not exceeding two thousand

rupees or to imprisonment of either description for a term not exceeding
six months or to both such fine and imprisonment;
Provided that—
(a) in any proceedings against a person in respect of
the offence of the contravention of the
provisions of subsection (1), it shall be a
defence to prove that he had reasonable
ground to believe and did believe that a
competent and reliable person was charged
with the duty of seeing that the provisions
of that subsection were complied with and
was in a position to discharge that duty; and
(b) a person shall not be liable to be sentenced to im-
prisonment for such an offence unless, in
the opinion of the court, the offence was
committed wilfully.
Signing of
153. (1) Every balance sheet of a company shall be balance sheet.
signed on behalf of the board by two of the directors of the

company, or, if there is only one director, by that director.
(6) In the case of a banking company, the

balance sheet shall be signed by the secretary or manager, if
any, and where there are more than three directors of the
company, by at least three of those directors, and where
there are not more than three directors by all the directors.
(7) Where any copy of a balance sheet which has
not been signed as required by the provisions of this section
is issued, circulated or published, the company which is in
default shall be guilty of an offence and shall be liable to a
fine not exceeding five hundred rupees.
Right to receive
154. (1) A copy of every balance sheet, including copies of balance
sheets and
every document required by any written law to be annexed auditors’ report.
thereto, which is to be laid before a company at a general

meeting together with a copy of the auditors' report, shall not
less than twenty-one days before the date of the meeting, in
the case of a company other than a private company, and
fourteen days before the date of the meeting in the case of
a private company, be sent to every member of the company (whether he
is or is not entitled to receive notices of general meetings of the
company), every holder of debentures of the company (whether he is or
is not so entitled), and all persons other than members or holders of
debentures of the company, being persons so entitled :
Provided that—
(a) in the case of a company not having a share
capital the provisions of this subsection
shall not require the sending of a copy of
the documents aforesaid to a member of
the company who is not entitled to
receive notice of general meetings of the
company or to a holder of debentures of
the company who is not so entitled;
(b) the provisions of this subsection shall not
require a copy of the documents aforesaid
to be sent—
(i) to a member of the company
or a holder of debentures of
the company, being in either
case a person who is not
entitled to receive notices of
general meetings of the
company and of whose
address the company is
unaware;
(ii) to more than one of the joint
holders of any shares or
debentures none of whom are
entitled to receive such
notices, to those who are not
entitled; and
(iii) in the case of joint holders of
any shares or debentures some
of whom are and some of
whom are not entitled to
receive such notices, to those
who are not entitled, and
(c) where the copies of the documents aforesaid
are sent less than twenty-one days before
the date of the meeting in the case of a
company other than a private company, or
less than fourteen days before the date of
the meeting in the case of a private
company, such copies shall,
notwithstanding that fact, be deemed to
have been duly sent if it is so agreed by
all the members entitled to attend and
vote at the meeting.
(2) Any member of a company, whether he is or

is not entitled to have sent to him copies of the balance
sheets of the company and any holder of debentures of the
company, whether he is or not so entitled, shall be entitled to
be furnished on demand, without charge, with a copy of the
last balance sheet of the company, including every document required by
any written law to be annexed thereto, together with a copy of the
auditors' report on the balance sheet.

offence and shall be liable to a fine not exceeding two
hundred and fifty rupees, and if when any person makes a
demand for any document with which he is by virtue of the
provisions of subsection (2) entitled to be furnished, default
is made in complying with such demand within seven days
from the date of making thereof, the company and every
officer of the company who is in default shall be guilty of an
offence and shall be liable to a default fine unless it is
proved that that person has already made a demand for, and
been furnished with, a copy of the document.
(4) The provisions of subsection (1) shall not

have effect in relation to a balance sheet of a private
company laid before it before the appointed date, and
accordingly the right of any person to be furnished with a
copy of any such balance sheet and the liability of the
company in respect of a failure to satisfy that right shall be
the same as they would have been if this Act had not been
brought into operation.
Banking and
155. (1) Every company, being a limited banking certain other
companies to
company or an insurance company or a deposit, provident, publish periodical
statement.
or benefit society, shall, before it commences business, and
also on the thirty-first day of March and thirtieth day of
September in every year during which it carries on business,
make a statement in the prescribed form or as near thereto as
(2) A copy of the statement shall be displayed in a
conspicuous place in the registered office of the company,
and in every branch office or place where the business of the
company is carried on.
(3) Every member and every creditor of the

company shall be entitled to a copy of the statement, on
payment of such sum of money not exceeding ten rupees, as
may be prescribed.

provisions of this section, the company and every officer of
the company who is in default shall be guilty of an offence
and shall be liable to a default fine.
(5) For the purposes of this Act, a company

which carries on the business of insurance in common with
any other business or businesses shall be deemed to be an
insurance company.
(6) The provisions of this section shall not apply

to any insurance company to which the provisions of any
written law for the time being in force as to the accounts and
balance sheet to be prepared annually and delivered by such
a company apply, where the company complied with those
provisions.
Appointment and
156 . (1) Every company shall at each annual remuneration of
auditors
general meeting, appoint an auditor or auditors to hold office
from the conclusion of that meeting until the conclusion of
the next annual general meeting.
(2) At any annual general meeting a retiring

auditor, however appointed, shall be reappointed without
any resolution to that effect being passed unless —
(a) He is not qualified for reappointment;
or
(b) A resolution has been passed at that
meeting appointing sombody instead
of him or providing expressly that he
shall not be reappointed; or
(c) He has givn the company notice in
writing of his unwillingness to be
reappointed;
Provided that where notice is given of an intended

resolution to appoint any person or persons in place of a
retiring auditor, and by reason of the death, incapacity or
disqualification of that person or of all those persons, as the
case may be, the resolution cannot be proceeded with, the
retiring auditor shall be automatically reappointed by virtue
of the provisions of this subsection.
(3) Where at an annual general meeting no

auditors are appointed or reappointed, the Register may
appoint a person to fill the vacancy.
(4) The company shall, within one week from the date
on which the power of the Registrar under the provisions of
subsection (3) becomes exercisable, give the Registrar
notice of that fact, and, where a company fails to give notice
as required by the provisions of this subsection, the
company and every officer of the company who is in default
shall be guilty of an offence and shall be liable to default
fine.
(5) (a) Subject as in hereinafter provided, the first
auditors of a company may be appointed by
the directors at any time before the first
annual general meeting, and auditors so
appointed shall hold office until the
conclusion of that meeting :
Provided that—
(i) the company may at a general
meeting remove any such auditors and
appoint in their place any other
persons who have been nominated for
appointment by any member of the
company and of whose nomination
notice has been given to the members
of the company not less than fourteen
days before the date of the meeting, in
the case of a company other than a
private company, or not less than
seven days before that date in the case
of a private company; and
(ii) where the directors fail to exercise
their powers under the provisions of
this subsection, the company at a
general meeting may appoint the first
auditors and thereupon such powers
of the directors shall cease.
(b) The directors may fill any casual vacancy in the
office of auditor, but while any such vacancy
continues, the surviving or continuing auditor
or auditors, if any, may act.
(6) The remuneration of the auditors of a company—

(a) in the case of an auditor appointed by the
directors or by the Registrar, may be fixed by
the directors or by the Registrar, as the case
may be;
(b) subject to the provisions of paragraph (a), shall
be fixed by the company at a general meeting
or in such manner as the company at a
general meeting may determine.
For the purposes of this subsection, the expression

"remuneration" shall include any sums paid by the company
in respect of the auditors' expenses.
(7) (a) No person other than a registered auditor shall be

eligible for appointment as an auditor under the provisions
of this section.
(b) Regulations shall be made providing for—
(i) the qualifications necessary in order to
secure such registration; and
(ii) the procedure for the
registration of auditors;
(iii) the fees payable for such
registration.
(8) Where persons practising in partnership as

auditors are appointed in the firm name, each of the partners
of the firm at the time of the appointment, shall be deemed
to be appointed as auditors and such appointment shall
continue notwithstanding any subsequent change in the
constitution of the partnership, provided at least one of the
original partners so appointed, remains in the firm.
(9) Any person who acts as an auditor of a

company without being registered as an auditor under the
provisions of subsection (7) shall be guilty of an offence and
shall be liable to a fine not exceeding rupees five hundred or
to imprisonment of either description for a term not
exceeding one year or to both such fine and imprisonment.
Provisions as to
157. (1) Special notice shall be required for a resolutions
relating to
appointment and
resolution at a company's annual general meeting appointing removal of
auditors.
as auditor a person other than a retiring auditor or providing
expressly that a retiring auditor shall not be reappointed.
(2) On receipt of notice of a resolution referred to in

subsection (1), the company shall forthwith send a copy
thereof to the retiring auditor, if any.
(3) Where notice is given of a resolution referred

to in subsection (1) and the retiring auditor makes, with
respect to such resolution, representations to the company in
writing (not exceeding a reasonable length) and requests
their notification to members of the company, the company
shall unless the representations are received by it within a
period of fourteen days from the date of the notice, send a
copy of the representations to every member of the company
to whom notice of the meeting is sent (whether before or
after receipt of the representations by the company), and
where a copy of the representations is not sent because of
the company's default, or because such representations were
received after the expiry of such period, the auditor may
(without prejudice to his right to be heard orally) require that
the representations shall be read out at the meeting:
Provided that no copies of the representations may be

sent and the representations may not be read out at the
meeting where, on the application either of the company or
of any other person who claims to be aggrieved, the court is
satisfied that the rights conferred by the provisions of this
section are being abused to secure unnecessary publicity.
for defamatory matter; and the court may order the company's costs on
such an application to be paid in whole or in part by the auditor,
notwithstanding that he is not a party to the application.
(4) The provisions of subsection (3) shall apply

to a resolution to remove the first auditors by virtue of the
provisions of subsection (5) of section 156 as it applies in
relation to a resolution that a retiring auditor shall not be
reappointed.
158. (1) No person who is— Disqualifications for

appointment as
(a) an officer or servant of the company; auditors
(b) a partner of or in the employment of

an officer or servant of the company ;
(c) a body corporate,
shall be qualified for appointment as an auditor of that
company.
Any reference in this subsection to an officer or servant

shall be construed as not including any reference to an
auditor.
(2) No person shall be eligible for appointment

as an auditor of a company unless he—
(a) is a member of the Institute of Chartered
Accountants of Sri Lanka ; or
(b) has the necessary qualifications referred to in
subsection (7) of section 156.
(3) Any person who acts as an auditor of a

company in contravention of the provisions of subsection (1)
shall be guilty of an offence and shall be liable to a fine not Auditors’ report
and right of access
exceeding one thousand rupees. to books and to
attend and be
bound at general
meetings.
159. (1) The auditors shall make a report to the
members on the accounts examined by them, and on every
balance sheet, every profit and loss account and all group
accounts laid before the company at a general meeting
during their tenure of office, and the report shall contain
statements as to the matters specified in the Seventh
Schedule hereto.
(2) The auditors report shall be read before the

company at a general meeting and shall be open to
inspection by any member, provided that where an auditor
qualifies a statement with reference to a particular report,
that report shall form part of the audit report.
10—A 63752(82/06)
(3) Every auditor of a company shall have a right of
access at all times to the books and accounts and vouchers and all
documents and records belonging to the company which they
consider necessary for the performance of their duties, and shall be
entitled to require from the officers of the company such
information and explanation as he thinks necessary for the
performance of the duties of the auditor.
(4) The auditors of a company shall be entitled to attend

any general meeting of the company and to receive all notices and
other communications relating to any general meeting which any
member of the company is entitled to receive, and to be heard at any
general meeting which they attend on any part of the business of the
meeting which concerns them as auditors.
Construction of
references to
160. References in this Act to a document annexed or documents
annexed to
required to be annexed to a company's accounts or any of them shall accounts
not include the directors' report or the auditors' report:
Provided that any information which is required by this Act to

be given in the accounts, and is thereby allowed to be given in a
statement annexed, may be given in the directors' report instead of
in the accounts and where any such information is so given, the
report shall be annexed to the accounts and the provisions of this
Act shall apply in relation thereto accordingly, except that the
auditors shall report thereon only so far as it gives the said
information.
161. (1)The Registrar may appoint one or more competent Investigation of

company’s affairs
on application of
inspectors to investigate the affairs of a company and to report
members.
thereon in such manner as the Registrar directs—
(a) in the case of a company having a share
capital, on the application either of not less
than fifty members or of members holding
not less than one-fifth of the shares issued;
(b) in the case of a company not having a share
capital, on the application of not less than
one-fifth in number of the persons on the
company's register of members.
(2) The application shall be supported by such evidence
as the Registrar may require for the purpose of showing that any
person making an application under the provisions of subsection (1)
has good reason for requiring the investigation, and the Registrar
may, before appointing an inspector, require such person to give
security, to an amount not exceeding two thousand five hundred
rupees for payment of the costs of the investigations.
(3) The Registrar may from time to time as and when he

deems necessary, require any person making an application under
the provisions of subsection (1) to make additional payments as
security for, and for further conduct of, the investigation and on
failure of such person to furnish any such amount as and when
required so to do, the Registrar may in his absolute discretion direct
that the security paid by virtue of the provisions of subsection (2) be
forfeited and terminate the investigation.
(4) The Registrar may as and when he deems necessary

call upon an inspector to furnish him with an interim report on any
investigation being conducted by such inspector.
Investigation of
162. Without prejudice to the provisions of section 161, company’s affairs
in other cases.
the Registrar—
(a) shall appoint one or more competent inspectors to
investigate the affairs of a company and to report
thereon in such manner as the Registrar directs,
where—
(i) the company by special resolution; or
(ii) the court by order,
declares that its affairs ought to be investigated by an
inspector appointed by the Registrar ;
(b) may appoint one or more competent inspectors to
investigate the affairs of a company and to report
thereon to the Registrar that there are circumstances
suggesting that—
(i) its business is being conducted with intent to
defraud its creditors or the creditors of any
other person or otherwise for a fraudulent or
unlawful purpose or in a manner oppressive
of any part of its members or that it was
formed for any fraudulent or unlawful
purpose; or
(ii) persons concerned with its formation or the

management of its affairs have in connection
therewith been guilty of fraud, misfeasance
or other misconduct towards it, or towards its
members; or
(iii) its members have not been given all the

information with respect to its affairs which
they might reasonably expect.
Power of
163. Where an inspector appointed under the provisions inspectors to carry
out investigation
of section 161 or section 162 to investigate the affairs of a company into affairs of
related companies.
thinks it necessary for the purposes of his investigation to
investigate also the affairs of any other body corporate which is or
has at any relevant time been the company's subsidiary or holding
company or a subsidiary of its holding company or a holding
company of its subsidiary, he shall, with the prior written approval
of the Registrar, have power so to do, and shall report on the affairs
of the other body corporate so far as he thinks the results of his
investigation thereof are relevant to the investigation of the affairs
of the first-mentioned company.
Production of
164. (1) It shall be the duty of all directors, officers and agents documents and
evidence on
of the company and of all directors, officers and agents of any other investigations.
body corporate whose affairs are investigated by virtue of the

provisions of section 163 to produce to the inspectors all books and
documents of, or relating to, the company or, as the case may be,
the other body corporate which are in their custody or power and to
attend before the inspectors when required to do so and otherwise to
give to the inspectors all assistance in connection with the
investigation which they are reasonably able to give.
(2) An inspector may examine on oath the officers and agents of
the company or other body corporate in relation to its business, and
may administer an oath accordingly.
(3) Where any officer or agent of the company or other

body corporate refuses to produce to the inspectors any book or
document which it is his duty under the provisions of this section so
to produce, or refuses to answer any question which is put to him by
the inspectors with respect to the affairs of the company or other
body corporate, as the case may be, the inspectors may certify the
refusal under their hand to the court, and the court may thereupon
inquire into the case, and after hearing any witnesses who

may be produced against or on behalf of the alleged offender and
after hearing any statement which may be offered in defence,
punish the offender in like manner as if he had been guilty of
contempt of court.
(4) Where an inspector thinks it necessary for the

purpose of his investigation that a person who he has no power to
examine on oath should be so examined, he may apply to the court
and the court may, if it sees fit, order that person to attend and be
examined on oath before it on any matter relevant to the
investigation, and on any such examination—
(a)the inspector may appear either personally or be
represented by an attorney-at-law ;
(b) the court may put such question to the persons
examined as the court thinks fit
(c)the person examined shall answer all such questions as
the court may put or allow to be put to him, but
may at his own cost be represented by an
attorney-at-law who shall be at liberty to put to
him such questions as the court may deem just
for the purpose of enabling him to explain or
qualify any answers given by him; and notes of
the examination shall be taken down in writing,
and shall be read over to or by, and signed by,
the person examined, and may thereafter be used
in evidence against him:
Provided that, notwithstanding anything in paragraph (c), the court may allow the
person examined such costs as in its discretion it may think fit and any costs so
allowed shall be paid as part of the expenses of the investigation.
(5) In this section, any reference to officers or to agents

shall include past, as well as present, officers or agents, as the case
may be, and the expression "agents" in relation to a company or
other body corporate, shall include the bankers or attorneys-at-law
of the company or other body corporate and any persons employed
by the company or other body corporate as auditors, whether those
persons are or are not officers of the company or other body
corporate.
Inspector’s
165. (1) In the course of an investigation an inspector may, and report
if so directed by the Registrar shall, make interim reports to the

Registrar, and on the conclusion of such investigation shall make a
final report to the Registrar. The final report shall be in writing or
be printed, as directed by the Registrar.
(2) The Registrar shall─
(a) forward a copy of any report made by the inspectors
to the registered office of the company;
(b) where he thinks fit, furnish a copy of any report on

request and on payment of the prescribed fee
to any other person who is a member of the
company or of any other body corporate dealt
with in the report by virtue of the provisions
of section 163, or whose interests as a
creditor of the company or of any such other
body corporate as, aforesaid appears to the
Registrar to be affected;
(c) where the inspector is appointed under the provisions

of section 161, furnish at the request of the
applicants for the investigation, a copy to
them; and
(d) where the inspector is appointed under the provisions

of section 162, in pursuance of an order of
the court, furnish a copy to the court,
and may also cause the report to be published in the Gazette.
166. (1) Where from any report made under the provisions of Proceedings on
inspector’s report.
section 165 it appears to the Registrar that any person has, in
relation to the company or to any other body corporate whose
affairs have been investigated by virtue of the provisions of section
163, been guilty of any offence for which he is criminally liable, the
Registrar shall if it appears to him that the case is one in which the
prosecution ought to be undertaken by the Attorney-General, refer
the matter to the Attorney-General.
(2) Where in any matter referred to the Attorney-
General under the provisions of subsection (1) the Attorney-General
considers that the case is one in which a prosecution ought to be
instituted, he shall institute proceedings accordingly, and it shall be
the duty of all officers and agents of the company or other body
corporate as aforesaid, as the case may be, (other than the defendant
in the proceedings) to give him all assistance in connection with
the prosecution which they are reasonably able to give and the
provisions of subsection (5) of section 164, shall apply for the
purposes of this subsection as they apply for the purposes of that
section.
(3) Where, in the case of any body corporate liable to be

wound up under this Act, it appears to the Registrar from any report
made under the provisions of section 165 that it is expedient so to
do by reason of any such circumstances as are referred to in sub-
paragraph (i) or sub-paragraph (ii) of paragraph (b) of section 162,
the Registrar may, unless the body corporate is already being
wound up by the court, present a petition for it to be so wound up if
the court thinks it just and equitable that it should be wound up or a
petition for an order under section 210 or section 211, or both such
petitions.
(4) Where from any report made under the provisions of

section 165, it appears to the Registrar that proceedings ought in the
public interest be instituted by the body corporate to which such
report relates for the recovery of damages in respect of any fraud,
misfeasance or other misconduct in connection with the promotion
or formation of that body corporate or the management of its affairs,
or for the recovery of any property of the body corporate which has
been misapplied or wrongfully retained the Registrar may himself
institute proceedings for that purpose in the name of such body
corporate.
(5) The Registrar shall indemnify the body corporate

against any costs or expenses incurred by it in or in connection with
any proceedings instituted under the provisions of subsection (4).
Expenses of
investigation of
167. (1) The expenses of, and incidental to, an investigation by company’s affairs.
an inspector appointed by the Registrar under the provisions of
section 161 or section 162 shall be defrayed in the first instance by
the Registrar but the following persons shall, to the extent specified,
be liable to repay the Registrar—
(a) any person who is convicted on a prosecution instituted as a
result of the investigation by the Attorney-General,
or who is ordered to pay damages, or restore any
property in proceedings instituted by
virtue of the provisions of subsection (4) of section
166, may in the same proceedings be ordered to pay
the said expenses to such extent as may be specified
in the order;
(b) any body corporate in whose name proceedings are

instituted as aforesaid shall be liable to the amount or
value of any sum or property recovered by it as a
result of those proceedings: and
(c) unless as a result of the investigation a prosecution is

instituted by the Attorney-General—
(i) any body corporate dealt with by the report,
where the inspector was appointed otherwise
than of the Registrar's own motion shall be liable,
except so far as the Registrar otherwise directs;
and
(ii) any person making an application for the inves-
tigation, where the inspector was appointed
under the provisions of section 161 shall be
liable to such extent, if any, as the Registrar may
direct,
and any amount for which a body corporate is liable by virtue of the provisions of
paragraph (b) shall be a first charge on the sum or property referred to in that
paragraph.
(2) The report of an inspector appointed otherwise than

of the Registrar's own motion may, if he thinks fit, and shall, if the
Registrar so directs, include a recommendation as to the directions
(if any) which such inspector thinks appropriate, as a result of his
investigation, to be given under the provisions of paragraph (c) of
subsection (1).
(3) For the purposes of this section, any costs or
expenses incurred by the Registrar in, or in connection with,
proceedings brought by virtue of the provisions of subsection (4) of
section 166 (including expenses incurred by virtue of the provisions
of subsection (5) of that section) shall be treated as expenses of the
investigation giving rise to the proceedings.
(4) Any liability to repay the Registrar imposed by the
provisions of paragraphs (a) and (b) of subsection (1) shall, subject
to satisfaction of the Registrar's right to repayment, be a liability
also to indemnify all persons against liability under the provisions
of paragraph (c) of subsection (1) and any such liability imposed by
the provisions of paragraph (a) shall, subject as aforesaid, be a
liability also to indemnify all persons against liability under the
provisions of paragraph (b) ; and any person, liable under the
provisions of paragraph (a) or paragraph (b) or sub-paragraph (i) or
sub-paragraph (ii) of paragraph (c) shall be entitled to contribution
from any other person liable under the same paragraph or sub-
paragraph, as the case may be, according to the amount of their
respective liabilities thereunder.
(5) The expenses to be defrayed by the Registrar under

the provisions of this section shall, so far as not recovered
thereunder, be paid out of moneys provided by Parliament for the
purpose.
Inspector’s
168. A copy of any report of any inspector appointed report to be
evidence.
under the provisions of section 161 or section 162 authenticated by
the seal of the company whose affairs they have investigated, shall
be admissible in any legal proceedings as evidence of the opinion of
the inspector in relation to any matter contained in the report.
Appointment and
169. (1) Where it appears to the Registrar that there is good powers of
inspectors to
reason so to do, he may appoint one or more inspectors to investigate
ownership of
investigate and report on the membership of any company and company.
otherwise with respect to the company for the purpose of

determining the true persons who are, or have been, financially
interested in the success or failure (real or apparent) of the company
or able to control or materially to influence the policy of the
company.
(2) The instrument of appointment of an inspector under
the provisions of subsection (1) may define the scope of his
investigation, whether as respects the matters or the period to which
it is to extend or otherwise, and in particular may limit the
investigation to matters connected with particular shares or
debentures.
(3) Where an application for an investigation under the
provisions of this section with respect to particular shares or
debentures of a company is made to the Registrar by members of
the company, and the number of applicants or the amount of the
shares held by them is not less than that required for an application
for the appointment of an inspector under the provisions of section
161, the Registrar shall appoint an inspector to conduct the
investigation unless he is satisfied that the application is vexatious,
and any matter which the application seeks to include in such
investigation other than those matters which the Registrar is
satisfied is unreasonable to be investigated, shall be included within
the scope of such investigation.
(4) Subject to the terms of appointment of an inspector,

his powers shall extend to the investigation of any circumstances
suggesting the existence of an arrangement or understanding which,
though not legally binding, is or was observed or likely to be
observed in practice and which is relevant to the purposes of his
investigation.
(5) For the purposes of any investigation under the

provisions of this section, the provisions of sections 163, 164 and
165 shall apply with the necessary modifications of references to
the affairs of the company or to those of any other body corporate,
so however that—
(a) the said sections shall apply in relation to all persons
who are or have been, or whom the inspector has
reasonable cause to believe to be or have been,
financially interested in the success or failure or
the apparent success or failure of the company or
any other body corporate whose membership is
investigated with that of the company, or able to
control or materially to influence the policy
thereof, including persons concerned only on
behalf of others, as they apply in relation to
officers and agents of the company or of the
other body corporate, as the case may be; and
(b) the Registrar is required to furnish the company with a

copy of any report by an inspector appointed
under the provisions of this section or with a
complete copy thereof, provided that the
company in turn is required to make available
such report to a shareholder on application.
(6) The expenses of any investigation made under the
provisions of this section shall be defrayed by the Registrar out of
moneys provided by Parliament for the purpose.
Power to require
170. (1) Where it appears to the Registrar that there is good information as to
persons interested
in shares or
reason to investigate the ownership of any shares in, or debentures debentures
of, a company and that it is unnecessary to appoint an inspector for

the purpose, the Registrar may require any person whom he has
reasonable cause to believe—
(a) to be or to have been interested in those shares or
debentures; or
(b) to act, or to have acted in relation to those shares or

debentures as the attorney or agent of any person
interested therein,
to give the Registrar any information which he has or can reasonably be expected
to obtain as to the present and past interests in those shares or debentures and the
names and addresses of the persons interested and of any persons who act or have
acted on their behalf in relation to the shares or debentures.
(2) For the purposes of this section, a person shall be

deemed to have an interest in a share or debenture if he has any
right to acquire or dispose of the share or debenture or any interest
therein or to vote in respect thereof, or if his consent is necessary
for the exercise of any of the rights of other persons interested
therein, or if other persons interested therein can be required or are
accustomed to exercise their rights in accordance with his
instructions.
(3) Any person who fails to give information required of .him

under the provisions of subsection (1) or who in giving any such
information makes any statement which he knows to be false in a
material particular, or recklessly makes any statement which is false
in a material particular, shall be guilty of an offence and shall be
liable to a fine not exceeding five thousand rupees or to
imprisonment of either description for a term not exceeding six
months or to both such fine and imprisonment.
Power to
171. (1) Where in connection with an investigation under the impose restrictions
on shares or
provisions of section 169 or section 170, it appears to the Registrar debentures.
that there is difficulty in finding out the relevant facts about any
shares (whether issued or to be issued), and that the difficulty is due
wholly or mainly to
the unwillingness of the persons concerned or any of them to assist the
investigation as required by the Registrar, the Registrar may by order direct that
the shares shall until further order, be subject to the restrictions imposed by the
provisions of this section,
(2) So long as any shares are directed to be subject to the

restrictions imposed by the provisions of this section—
(a) any transfer of those shares, or in the case of unissued shares
any transfer of the right to be issued therewith and
any issue thereof, shall be void;
(b) no voting rights shall be exercisable in respect of those
shares;
(c) no further shares shall be issued in right of those shares or in
pursuance of any offer made to the holder thereof;
(d) except in a liquidation, no payment shall be made on any
sums due from the company on those shares,
whether in respect of capital or otherwise.
(3) Where the Registrar makes an order directing that

shares shall be subject to the restrictions specified in subsection (2)
or refuses to make an order directing that shares shall cease to be
subject thereto, any person aggrieved by such order may appeal to
the court against such order and the court may, if it sees fit, direct
that the shares cease to be subject to such restrictions.
(4) Any order, whether of the Registrar or court

directing that shares shall cease to be subject to the said restrictions,
which is expressed to be made with a view to permitting a transfer
of those shares may continue the restrictions specified in paragraphs
(c) and (d) of subsection (2) either in whole or in part, so far as they
relate to any right acquired or offer made before the transfer.
(5) Any person who—

(a) exercises or purports to exercise any right to dispose of
any shares which, to his knowledge, are for the time
being subject to the restrictions specified in
subsection (2) or of any right to be issued with any
such shares ; or
(b) votes in respect of any such shares, whether as holder or
proxy or appoints a proxy to vote in respect thereof;
or
(c) being the holder of any such shares, fails to notify of

their being subject to the restrictions specified in
subsection (2) any person whom he does not know to
be aware of that fact but does know to be entitled,
apart from such restrictions, to vote in respect of
those shares whether as holder or proxy,
shall be guilty of an offence and shall be liable to a fine not exceeding five
thousand rupees or to imprisonment of either description for a term not exceeding
six months or to both such fine and imprisonment.
(6) Where shares in any company are issued in contra-

vention of the restrictions specified in subsection (2), the company
an offence and shall be liable to a fine not exceeding five thousand
rupees.
(7) A prosecution shall not be instituted under the pro-

visions of this section except by or with the consent of the
Registrar.
(8) The provisions of this section shall apply in relation

to debentures as it applies in relation to shares.
172. Nothing in the preceding provisions of this Part Savings for

attorneys-at-law
and bankers.
shall require disclosure to the Registrar or to an inspector appointed
by the Registrar—
(a) by an attorney-at-law, of any privileged communication
made to him in that capacity, except as respects the
name and address of his client; or
(b) by a company's bankers, of any information as to the affairs
of any of their customers other than the company.
Registrar's
powers to verify
173. The Registrar shall have the power to verify the assets and assets and
liabilities.
liabilities of any company.
DIRECTORS, SECRETARIES AND MANAGERS
Directors.
174. Every company registered after the appointed date
(other than a private company) shall have at least two directors, and
every private company shall have at least one director.
Secretary.
175. (1) With every memorandum delivered for registration in

accordance with the provisions of section 14, there shall be
delivered, within such period as may be prescribed, a statement in
the prescribed form containing the names and relevant particulars of
—
(a) the person who is, or the persons who are, to be the first
director or directors of the company; and
(b) the person who is, or the persons who are, to be the first
secretary or joint secretaries of the company:
Provided however, that in the case of a private company, the particulars referred
to in paragraphs (a) and (b) shall be delivered within such period as may be
prescribed, after incorporation.
(2) The relevant particulars referred to in subsection (1)

shall be with respect to a person named as director, secretary, or as
one of the joint secretaries, the particulars which by the provisions
of subsection (1) of section 194 are required to be contained in the
register kept under the provisions of that section.
(3) The statement required by the provisions of

subsection (1) shall be signed by or on behalf of the subscribers of
the memorandum and shall contain a consent signed by each of the
persons named in it as a director, as secretary or as one of the joint
secretaries to act in their respective capacity.
(4) Where the memorandum is delivered by a person as

agent for the subscribers of the memorandum, the statement
required by this section shall specify that fact and the name and
address of that person.
(5) The persons named in the statement referred to in

subsection (1) as the director or directors, secretary or joint
secretaries of a company shall, on the incorporation of the company,
be deemed to have been respectively appointed as the first director or
directors, secretary or joint secretaries of the company; and any
appointment by any articles
delivered with the memorandum of a person as director or secretary
of the company shall be void unless he is named as a director or as
secretary in the statement.
(6) Where a statement complying with the requirements

of this section is not delivered as required by subsection (1) with
any memorandum delivered for registration in accordance with the
provisions of section 14, the Registrar shall not register the
memorandum or any articles delivered with it.
Qualifications
176. (1) The secretary of every company other than a private of secretary of
company to be
company shall have such qualifications as may be prescribed having prescribed.
regard to the nature of the duties the secretary will be called upon to
discharge.
(2) Every private company, having a turnover of or paid-

up capital of an amount prescribed under this Act, shall have a
secretary who shall have such qualifications as may be prescribed.
Prohibition of
177. No company shall— certain persons
being sole director
or secretary.
(a) have as secretary to the company, a corporation the sole
director of which is the sole director of the
company ; or
(b) have as sole director of the company, a corporation the
sole director of which is secretary to the company.
Avoidance of acts done

178. Any provision requiring or authorizing any act to by person in dual
capacity as director and
secretary.
be done by or to a director and the secretary shall not be satisfied by
such act being done by or to the same person acting both as director
and as, or in place of, the secretary.
179. (1) A person shall not be capable of being appointed

director of a company by the articles and shall not be named as a
director or proposed director of a company in a prospectus issued by or
on behalf of the company, or as proposed director of an intended
company in a prospectus issued in relation to that intended company,
or in a statement in lieu of prospectus delivered to the Registrar by or
on behalf of a company, unless, before the registration of the articles or
the publication of the prospectus, or the delivery of the statement in
lieu of prospectus, as the case may be, he has by himself or by his
agent authorized in writing—
(a) signed and delivered to the Registrar for registration his

consent in writing to act as such director; and
(b) either )
(i) signed the memorandum for a number of shares
not less than his qualification, if any; or
(ii) taken from the company and paid for, or agreed
to pay for, his qualification shares, if any ; or
(iii) signed and delivered to the Registrar for
registration an undertaking in writing to take
from the company and pay for his qualification
shares, if any; or
(iv)made and delivered to the Registrar for regis-
tration a statutory declaration to the effect that a
number of shares, not less than his qualification,
if any, are registered in his name.
(2) Where a person has signed and delivered as referred to in

subsection (1) an undertaking to take and pay for his qualification
shares, he shall, as regards those shares, be in the same position as if he
had signed the memorandum for that number of shares.
(3) On the application for registration of the memorandum and

articles of a company, the person making such application shall deliver
to the Registrar a list of the persons who have consented to be directors
of the company, and, where such list contains the name of any person
who has not so consented, the person making such application shall be
guilty of an offence and shall be liable to a fine not exceeding five
hundred rupees.
(4) Any reference in this section to the share qualification of a

director or proposed director shall be construed as including only a
share qualification required on appointment or within a period
determined with regard to the time of appointment and any reference
therein to qualification shares shall be construed accordingly.
(5) The provisions of this section shall not apply to—
(a) a company not having a share capital; or
(b) a prospectus issued by or on behalf of a company after the

expiration of one year from the date on which the
company was entitled to commence business.
Qualification
180. (1) Without a prejudice to the restrictions imposed by the of
director or manager.
provisions of section 179, it shall be the duty of every director who is
by the articles of the company required to hold a specified share
qualification and who is not already qualified to obtain his
qualification within two months after his appointment or such shorter
time as may be fixed by the articles.
(2) For the purpose of any provision in the articles requiring a

director or manager to hold a specified share qualification the bearer of
a share warrant shall not be deemed to be the holder of the shares
specified in the warrant.
(3) Where any person appointed as director of a company does not,

within two months from the date of his appointment, or within a period
of such shorter time as may be fixed by the articles, obtains his share
qualification, or if after the expiration of such period or such shorter
time, as the case may be, ceases at any time to hold such share
qualification, he shall be deemed to have vacated office as such
director.
(4) A person vacating office under the provisions of sub-section (3)

shall not be eligible of being reappointed director of the company until
he has obtained his share qualification.
(5) Where after the expiration of such period or shorter time as is

referred to in subsection (3) any person who does not have the
necessary share qualification acts as a director of the company, he shall
be guilty of an offence and shall be liable to a fine not exceeding two
hundred and fifty rupees for every day between the expiration of such
period or shorter time or the day on which he ceased to possess the
necessary share qualification, as the case may be, and the last day on
which it is proved that he acted as a director.
RETIRING AGE OF DIRECTORS

Age limit for
181. (1) Save as otherwise provided in section 182, no person shall Directors.
be capable of being appointed a director of a public company or of a

private company which is a subsidiary of a public company, if he has
attained the age of seventy years.
(2) Save as aforesaid, a director of a public company or of a private

company which is a subsidiary of a public company shall vacate his
office at the conclusion of the annual general meeting commencing
next after he attains the age of seventy years:
11—A 63752 (82/06)
Provided that the provisions of this subsection shall not apply to a
director who is in office on the appointed date so as to require the
termination of the appointment held by him before the conclusion of
the third annual general meeting held after the appointed date, but shall
apply so as to terminate such appointment at the conclusion of that
meeting, if he had attained the age of seventy years before the date of
commencement of the meeting.
(3) Where a person retires by virtue of the provisions subsection

(2) no provision for the automatic reappointment of retiring directors
in default of another appointment shall apply ; and if at the meeting at
the conclusion of which he retires, the vacancy is not filled, it may be
filled as a casual vacancy.
182. (1) Nothing in the provisions of section 181 shall prevent the Age limit not to
apply if company
so resolves.
appointment of a director who has attained the age of seventy years or
require a director who has attained that age to retire if his appointment
is or was made or approved by a resolution passed by the company at a
general meeting and specially declaring that the age limit referred to in
section 181 shall not apply to such director.
(2) Special notice shall be required of any such resolution referred

to in subsection (1) and unless such notice is given, such resolution
shall be void.
(3) Notice of any resolution referred to in subsection (1) given to

the company, and by the company to its members, shall state or shall
have stated the age of the person to whom it relates.
Duty of directors
183. (1) Any person who is appointed, or to his knowledge is to disclose age.
proposed to be appointed, director of a company at a time when he has

attained the age of seventy years or such lower age, if any, as may be
specified in the company's articles in that behalf, shall give notice of
his age to the company :
Provided that the provisions of this subsection shall not apply in
relation to a person's reappointment on the termination of his previous
appointment as director of the company, where notice has been given
as aforesaid in
connection with, or at any time during the continuance of such

previous appointment or any appointment as director prior to such
previous appointment.
(2) Any person who—

(a) fails to give notice of his age as required by the
provisions of subsection (1) ; or
(b) acts as director under any appointment which is
invalid, or which has terminated, by reason of his
age,
shall be liable to a fine not exceeding fifty rupees for every day during
which the failure continues or during which he continues to act as
aforesaid, as the case may be.
(3) For the purposes of the provisions of paragraph (b) of

subsection (2), a person who has acted as director under an
appointment which is invalid or has terminated, shall be deemed to
have continued so to act throughout the period from the date of the
invalid appointment or the date on which the appointment terminated,
as the case may be, until the last day on which he acted thereunder.
Appointment of
directors to be
184. (1) At a general meeting of a company other than a private voted on
individually.
company, a motion for the appointment of two or more persons as
directors of the company by a single resolution shall not be made,
unless a resolution that it shall be so made has first been agreed to by
the meeting without any vote being given against it.
(2) A resolution moved in contravention of the provisions of

subsection (1) shall be void, whether or not its being so moved was
objected to at the time:
Provided that—
(a) the provisions of this subsection shall not be taken as
excluding the operation of the provisions of section 193 ;
and
(b) where a resolution moved in contravention of the pro-
visions of subsection (1) is passed, no provision for the
automatic reappointment of retiring directors in default of
another appointment shall apply.
(3) For the purposes of this section, a motion for approving a

person's appointment or for nominating a person for appointment shall
be treated as a motion for his appointment.
(4) Nothing in this section shall apply to a resolution altering the

company's articles.
Removal of
directors
185. (1) A company may by ordinary resolution remove a
director before the expiration of his period of office notwithstanding
anything in its articles or any agreement between the company and him
:
Provided that, in the case of a private company, the removal of a

director holding office for life on the appointed date, whether or not
subject to retirement under an age limit by virtue of the articles or
otherwise, shall be by special resolution.
(2) Special notice shall be required of any resolution to remove a

director under the provisions of this section or to appoint somebody
instead of a director so removed at the meeting at which he is removed,
and on receipt of notice of an intended resolution to remove a director
under the provisions of this section, the company shall forthwith send a
copy thereof to the director concerned, and the director (whether or not
he is a member of the company) shall be entitled to be heard on the
resolution at the meeting.
(3) Where notice is given of an intended resolution to remove a

director under the provisions of this section and the director concerned
makes with respect thereto representations to the company in writing
(not exceeding a reasonable length) and requests their notification to
members of the company, the company shall, unless the
representations are received within a period of fourteen days from the
date of the notice, send a copy of the representations to every member
of the company to whom notice of the meeting is sent (whether before
or after receipt of the representations by the company), and where a
copy of the representations is not sent because of the company's
default, or because such representations were received after the expiry
of such period, the director may (without prejudice to his right to be
heard orally) require that the representations shall be read out at the
meeting:
Provided that no copies of the representations may be sent and. the

representations may not be read out at the meeting where, on the
application either of the company or of any other person who claims to
be aggrieved, the
court is satisfied that the rights conferred by the provisions of this

section are being abused to secure unnecessary publicity for
defamatory matter; and the court may order the company's costs on
such an application to be paid in whole or in part by the director,
notwithstanding that he is not a party to the application.
(4) Any vacancy created by the removal of a director under the

provisions of this section, if not filled at the meeting at which he is
removed, may be filled as a casual vacancy.
(5) Any person appointed director in place of a person removed

under the provisions of this section shall, for the purposes of
determining the time at which he or any other director is to retire, be
treated as if such person had become director on the day on which the
person in whose place he is appointed was last appointed a director.
(6) Nothing in this section shall be taken as depriving a person

removed thereunder of compensation or damages payable to him in
respect of the termination of his appointment as director or of any
appointment terminating with that as director or as derogating from
any power to remove a director which may exist apart from the
provisions of this section.
Power to
restrain
186. (1) Where a person is convicted of any offence in persons
convicted of
connection with the promotion, formation or management of a certain
offences from
managing
company, or in respect of any offence under Part V or Part VI, or with companies
the offence of fraud and is sentenced to more than three months'

imprisonment in respect of such latter offence, the court convicting
such person may in, addition to imposing any punishment provided for
such offence, order that such person shall—
(a) be removed from the office of director; or

(b) be suspended from the office of director for a period
specified in such order,
and the court may, whether or not in addition to an order with respect
to paragraph (a) or paragraph (b), order that such person shall not,
without the leave of the court, be a director, or in any way, whether
directly or indirectly, be concerned or take part in the promotion,
formation or management of a company for such period not exceeding
five years as may be specified in such order.
(2) In subsection (1) the expression "the court"

in relation to the making of an order against any person by virtue of the
provisions of paragraph (a) includes the court before which he is
convicted, as well as any court having jurisdiction to wind up the
company, and in relation to the granting of leave means any court
having jurisdiction to wind up the company as respects which leave is
sought.
(3) A person intending to make an application, to the court having

jurisdiction, for an order under the provisions of this section to wind up
a company shall give not less than ten days' notice of such intention to
the person against whom the order is sought, and on the hearing of
such application the last-mentioned person may appear and himself
give evidence or call witnesses.
(4) An application to the court having jurisdiction for an order

under the provisions of this section to wind up a company may be
made by the official receiver or by the liquidator of the company or by
any person who is or has been a member or creditor of the company,
and at the hearing of any such application for leave under the
provisions of subsection (1) by a person against whom an order has
been made, the official receiver or liquidator shall appear and call the
attention of the court to any matters which seem to him to be relevant,
and may himself give evidence or call witnesses.
(5) An order may be made by virtue of the provisions of subsection

(1), notwithstanding that the person concerned, may be criminally
liable in respect of the matters on the ground of which the order is to
be made, and for the purposes of the said subsection (1) the expression
"officer" shall include any person in accordance with whose directions
or instructions the directors of the company have been accustomed to
act.
(6) Any person acting in contravention of an order made under the
provisions of this section, shall be guilty of an offence and shall be
liable to a fine not exceeding five thousand rupees or to imprisonment
of either description for a term not exceeding six months or to both
such fine and imprisonment.
187. (1) No company shall pay a director remuneration Prohibition of tax-

free payments to
directors.
(whether as director or otherwise), free of income tax or profits tax or
otherwise calculated by reference to or varying with the amount of
income tax or profits tax, or to or with the rate or standard rate of
income tax or profits tax, except
under a contract which is in force on the appointed date, and provides

expressly, and not by reference to the articles, for payment of
remuneration as aforesaid.
(2) Any provision contained in a company's articles or in any

contract other than a contract referred to in subsection (1) or in any
resolution of a company or a resolution of the board of directors, for
payment to a director of remuneration as aforesaid shall have effect as
if it provided for payment, as a gross sum subject to income tax and
profits tax, of the net sum for which it actually provides.
(3) The provisions of this section shall not apply to remuneration

due before the appointed date or in respect of a period before that date.
188. (1) No company shall grant a loan to any person who is its Prohibition of
loans to directors
director or a director of its holding company, or to enter into any
guarantee or provide any security in connection with a loan granted to
such a person by any other person:
Provided that nothing in this section shall apply either—
(a) to anything done by a subsidiary where the director is its

holding company; or
(b) subject to the next following subsection, to anything done to
provide any such person as aforesaid with funds to meet
expenditure incurred or to be incurred by him for the purposes
of the company or for the purpose of enabling him properly to
perform his duties as an officer of the company ; or
(c) in the case of a company whose ordinary business includes the
lending of money or the giving of guarantees in connection
with loans made by other persons, to anything done by the
company in the ordinary course of that business.
(2) The provisions of paragraph (b) of the proviso to subsection (1)
shall not authorize the making of any loan, or the entering into any
guarantee or the provision of any security, unless—
(a) with the prior approval of the company given at a general

meeting at which the purposes of the expenditure and the
amount of the loan or the amount of the guarantee or security,
as the case may be, are disclosed; or
(b) on condition that, if the approval of the company is

not given as aforesaid at or before the next following annual
general meeting, the loan shall be repaid or the liability under
the guarantee or security shall be discharged, as the case may
be, within six months from the date of conclusion of that
meeting.
(3) Where the approval of the company is not given under the
provisions of subsection (2), the directors authorizing the making of the
loan, or the entering into the guarantee, or the provision of the security,
shall be jointly and severally liable to indemnify the company against
any loss arising therefrom.
189. (1) No company shall make to any director of such company, Approval of
company requisite
for payment by it
any payment by way of compensation for loss of office, or as to director for loss
of office, &c., or
consideration for, or in connection with, his retirement from office, for any payment,
in connection with
unless particulars with respect to the payment (including the amount transfer
of its property,
thereof) are disclosed to members of the company and the making of &c.
such payment is approved by the company:
Provided, however, that a company may make any such payment as

aforesaid, if the payment is made in accordance with a scheme that is
uniformly applicable in that company.
(2) No company shall in connection with the transfer of the whole

or any part of the undertaking or property of such company, make any
payment to any director of such company by way of compensation for
loss of office, or as consideration for or in connection with his
retirement from office, unless particulars with respect to the payment
(including the amount thereof) are disclosed to the members of the
company and the making of such payment is approved by the company.
(3) Where a payment is made to a director of the company in
contravention of the provisions of subsection (1) the amount received
by such director shall be deemed to have been received by him in trust
for the company.
Duty of director to
190. (1) Where, in connection with the transfer to any person of all disclose payment
for loss of office,
or any of the shares in a company, being a transfer resulting from— &c., made in
connection with
(a) an offer made to the general body of shareholders: transfer of shares
in company.
(b) an offer made by or on behalf of some other body corporate with

a view to the company becoming its, subsidiary or a
subsidiary of the holding company ;
(c) an offer made by or on behalf of an individual with a view to his
obtaining the right to exercise or control the exercise of not
less than one-third of the voting power at any general meeting
of the company ; or
(d) any other offer which is conditional upon
acceptance to a given extent,
a payment is to be made to a director of the company by way of

compensation for loss of office, or as consideration for or in connection
with his retirement from office, it shall be the duty of that director to
take all reasonable steps to secure that particulars with respect to the
proposed payment (including the amount thereof) shall be included in
or sent with any notice of the offer made for their shares which is given
to any shareholders.
(2) Where—
(a) any such director fails to take reasonable steps as
referred to in subsection (1) ; or
(b) any person who has been lawfully required by any
director to include such particulars in, or send
them with, any such notice as is referred to in
subsection (1), fails so to do,
he shall be guilty of an offence and shall be liable to a fine

not exceeding two hundred and fifty rupees.
(3) Where—
(a) the requirements of subsection (1) are not complied
with in relation to any such payment as is referred to
in that subsection; or
(b) the making of the proposed payment is not, before
the transfer of any shares in pursuance of the offer,
approved by a meeting summoned for the purpose of
the holders of the shares to which the offer relates
and of other holders of shares of the same class as
any of the said shares,
any sum received by the director on account of the payment shall be

deemed to have been received by him in trust for any persons who have
sold their shares as a result of the offer made, and the expenses incurred
by him in distributing that sum amongst those persons shall be borne by
him and not retained out of that sum.
(4) Where the shareholders referred to in paragraph (b) of

subsection (3) are not all the members of the company and no provision
is made by the articles for summoning or regulating such a meeting as
is referred to in that paragraph, the provisions of this Act and of the
company's articles relating to general meetings of the company shall,
for that purpose, apply to the meeting either without modification or
with such modifications as the Registrar on the application of any
person concerned may direct for the purpose of adapting them to the
circumstances of the meeting.
(5) Where at a meeting summoned for the purpose of approving any

payment as required by the provisions of paragraph (b) of subsection
(3), a quorum is not present and, after the meeting has been adjourned
to a later date, a quorum is again not present, the payment shall be
deemed for the purposes of that subsection to have been approved.
191. (1) Where in proceedings for the recovery of any payment as Provisions
supplementary to
the provisions of
having, by virtue of the provisions of subsections (2) and (3) of section sections 189 and
190.
189 or subsections (1) and (3) of section 190, been received by any
person in trust, it is shown that—
(a) the payment was made in pursuance of any arrangement entered
into as part of the agreement for the transfer in question, or
within one year before or two years after that agreement or the
offer leading thereto; and
(b) the company or any person to whom the transfer was made was
privy to such arrangement,
the payment, shall be deemed, except in so far as the contrary is shown

to be one to which the provisions of such subsections apply.
(2) Where in connection with any such transfer as is referred to in

section 189 or section 190—
(a) the price to be paid to a director of the company whose office is
to be abolished or who is to retire from office for any shares in
the company held by him, is in excess of the price which
could at the time have been obtained by the holders of like
shares; or
(b) any valuable consideration is given to any such director,
the excess or the money value of the consideration, as the case may be,
shall, for the purposes of the provisions of that section, be deemed to
have been a payment made to him by way of compensation for loss of
office or as consideration for or in connection with his retirement from
office.
(3) Any reference in the provisions of section 189 or section 190 to

any payment made to any director of a company by way of compensation
for loss of office, or as consideration for or in connection with his
retirement from office, does not include any bona fide payment by way
of damages for breach of contract or by way of pension in respect of past
services.
For the purposes of this subsection the expression "pension" includes

any superannuation allowance, superannuation gratuity or similar
payment.
(4) Nothing in the provisions of section 189 or section 190 shall be taken to prejudice
the operation of any rule of law requiring disclosure to be made with respect to any
such payments as are therein referred to or with respect to any other like payments
made or to be made to the directors of a company.
192. (1) Where any person being an uncertificated insolvent or an Provisions

as to
undischarged bankrupt acts as director of, or directly or indirectly takes uncertificated
insolvents and
part in or is concerned in the management of, any company except with undischarged
bankrupts acting
as directors.
the leave of the court by which he was adjudged insolvent or bankrupt,
he shall be guilty of an offence and shall be liable to a fine not exceeding
five thousand rupees or to imprisonment of either description for a term
not exceeding six months or to both such fine and imprisonment:
Provided that a person shall not be guilty of an offence under the

provisions of this section by reason of the fact that he, being an
uncertificated insolvent or an undischarged bankrupt, has acted as
director of, or taken part or been concerned in the management of, a
company, if he was on the appointed date, acting as director of, or taking
part or being concerned in the management of, that company and has
continuously so acted, taken part, or been concerned since that date and
the insolvency or bankruptcy was prior to that date.
(2) The leave of the court for the purposes of subsection (1) shall not
be given unless notice of intention to apply therefor has been served on
the official receiver and it shall be the duty of the official receiver, where
he is of opinion that it is contrary to the public interest that any such
application should be granted, to attend at the hearing, and oppose the
granting, of the application.
(3) In this section the expression "company" includes an unregistered

company and a company incorporated outside Sri Lanka which has an
established place of business within Sri Lanka.
193. Any act of a director, secretary or manager shall be valid Validity of acts of
directors &c,
notwithstanding any defect that may afterwards be discovered in his
appointment or qualification.
194. (I) Every company shall keep at its registered office a register of Register of
directors and
secretaries.
its directors and secretaries containing with respect to each of them the
following particulars, that is to say:—
(a) in the case of an individual, his present name and surname, any
former name or surname, his usual residential address, his
nationality, and, if that nationality is not the nationality of origin,
his nationality of origin, his business occupation, if any, and
particulars o£ any other directorships, held by him; and
(b) in the case of a corporation, its corporate name and registered or
principal office ;
Provided that it shall not be necessary for the register to contain

particulars of directorships held by a director of a company, in other
companies of which such company is the wholly-owned subsidiary or
such other companies are the wholly-owned subsidiaries either of such
company or of another company of which such company is the wholly-
owned subsidiary, and for the purposes of this proviso—
(i) the expression "company" shall include any body corporate
incorporated in Sri Lanka; and
(ii) a body corporate shall be deemed to be the wholly owned
subsidiary of another if it has no members except that other and
that others wholly-owned subsidiaries and its or their nominees.
(2) The company shall send to the Registrar, within fourteen

days from the date of appointment of the first director or that of the
secretary of the company, a return in the prescribed form containing
the particulars specified in the register referred to in subsection (1)
and within fourteen days from the date of any change among its
directors or any change of its secretary or in any of the particulars
contained in such register a notification in the prescribed form
together with, in the case of a change among its directors or a
change of its secretary, a letter to the Registrar from each new
director or the secretary stating that such director or the secretary
has accepted the appointment.
(3) The register to be kept under the provisions of this section

shall during business hours (subject to such reasonable restrictions
as the company may by its articles or in general meeting impose, so
that not less than two hours in each day be allowed for inspection)
be open to the inspection of any member of the company without
charge and of any other person on payment of ten rupees, or such
less sum as the company may prescribe for each inspection.
(4) Where any inspection required under the provisions of

subsection (3) is refused or where default is made in complying
with the provisions of subsection (1) or subsection (2), the company
an offence and shall be liable to a default fine.
Particulars with
respect to
directors in trade
(5) Where any inspection required under the provisions of catalogues,
circulars, &c.
subsection (3) is refused unreasonably, in the case of any such
refusal, the court may by order compel an immediate inspection of
the register.
(6) For the purposes of this section, a person in accordance with

whose directions or instructions the directors of a company are
accustomed to act shall be deemed to be a director and officer of the
company.
195. (1) Every company to which the provisions of this section

apply shall, in all trade catalogues, trade circulars, showcards and
business letters on or in which the company's name appears and
which are issued or sent by the company to any person, state in
legible characters with respect to every director being a corporation,
the corporate name, and with respect to every director being an
individual, his present name, or the initials thereof, and present
surname.
(2) The provisions of this section shall apply to—

(a) every company registered under this Act or under any
written law repealed by this Act;
(b) every company registered in Sri Lanka as an offshore
company; and
(c) every company incorporated outside Sri Lanka which has an
established place of business within Sri Lanka.
(3) Where a company makes default in complying with the

provisions of this section, every officer of the company who is in
exceeding two hundred and fifty rupees, and for the purposes of this
subsection where a corporation is an officer of the company, every
officer of the corporation shall be deemed to be an officer of the
company:
Provided that no proceedings shall be instituted for any offence

under the provisions of this section except, by or with the consent
of, the Registrar.

(a) the expression "director" includes any person in accordance
with whose directions or instructions the directors of the
company are accustomed to act and the expression "officer"
shall be construed accordingly ;
(b) the expression "initials" includes a recognized abbreviation
of the first name or forename;
(c) in the case of a person usually known by a name different
from his surname, the expression "surname" means that
name;
(d) any preference to a former name or surname does not
include—
(i) in the case of a person usually known by a name
different from his surname, the name by which he
was known previous to the adoption of that name;
(ii) in the case of a citizen of Sri Lanka a former name or
surname where that name or surname was changed or
disused before the person bearing the name attained
the age of of eighteen years; or
(iii) in the case of a married woman, the name or surname by

which she was known previous to her marriage ; and
(e) the expression "showcards" means cards containing or
exhibiting articles dealt with, or samples or representations
thereof.
196. (1) In a limited company the liability of the directors or Limited company
may have
directors with
managers, or of the managing director, may, if so provided by the unlimited liability.
Special resolutions
memorandum, be unlimited. of limited
company
making liability
of directors
(2) In a limited company in which the liability of a director or unlimited.
manager is unlimited, the directors or managers of the company, if

any, and the member who proposes a person for election or
appointment to the office of director or manager, shall add to that
proposal a statement that the liability of the person holding that
office shall be unlimited, and the promoters, directors, managers
and secretary, if any, of the company, or one of them, shall, before
the person accepts the office or acts therein, give him notice in
writing that his liability will be unlimited.
(3) Where any director, manager, or proposer makes default in

adding the statement referred to in subsection (1) or where any
promoter, director, manager, or secretary makes default in giving
the notice referred to in that subsection, he shall be guilty of an
offence and shall be liable to a fine not exceeding one thousand
rupees, and shall also be liable for any damage which the person so
elected or appointed may sustain from the default, but the liability
of the person elected or appointed shall not be affected by the
default.
197. (1) A limited company if so authorized by its articles, may, Special

resolutions
by special resolution, alter its memorandum so as to render of limited
company
making liability
unlimited the liability of its directors, or managers, or of any of directors
unlimited.
managing director.
(2) Upon the passing of any such special resolution as is
referred to in subsection (1), the provisions of such resolution shall
be as valid and effectual as if such provisions had been originally
contained in the memorandum.
198. (1) Every company shall keep a register showing as Register of

directors’
shareholdings &c.
respects each director of the company (not being its holding
company) or the spouse or son or daughter of such director as the
case may be, the number, description and amount of any shares in
or debentures of the company or any other body corporate, being
the company's subsidiary or holding company, or a subsidiary of the
company's holding company, which are held by or in trust for or of
which such director or the spouse, son or daughter of such director
has any right to become the holder (whether on payment or not) :
Provided that the register may not include shares in any body
corporate which is the wholly-owned subsidiary of another body
corporate, and for this purpose a body corporate shall be deemed to
be the wholly-owned subsidiary of another if it has no members but
that other and that others wholly-owned subsidiaries and its or their
nominees.
In this section the expression "son" includes step-son and

adopted son, and the expression "daughter" includes step-daughter
and adopted daughter.
(2) Where any shares or debentures fail to be or cease to be

recorded in the said register in relation to any director or the spouse,
son or daughter of such director by reason of a transaction entered
into on or after the appointed date and while he is a director, the
register shall also show the date of and price or other consideration
for the transaction :
Provided that where there is an interval between the agreement

for any such transaction and the transaction itself, the date shown
shall be the date of the agreement.
(3) The nature and extent of the interest or right of the director,
or the spouse, son or daughter of such director in or over any shares
or debentures recorded in relation to a loan on the said register
shall, if he so requires, be indicated in the register.
(4) The company shall not, by virtue of anything done for the
purposes of this section, be affected with notice of, or put upon
inquiry as to the rights of, any person in relation to any shares or
debentures, and the provisions of section 114 shall, notwithstanding
anything in this section contained, have full force and effect.
(5) The said register shall, subject to the provisions of this

section, be open to inspection during business hours (subject to such
reasonable restrictions as the company may by its articles or in
general meeting impose), so that not less than two hours in each day
be allowed for inspection, as follows:—
(a) during the period beginning fourteen days immediately prior
to the date of the annual general meeting of the company
and ending three days immediately after the date of its
conclusion, it shall be open to the inspection of any member
or holder of debentures of the company; and
(b) during that or any other period, it shall be open to the
inspection of any person acting on behalf of the Registrar.
In computing the fourteen days and the three days referred to in

this subsection any day which is a bank holiday or a public holiday
shall be disregarded.
(6) Without prejudice to the rights conferred by the provisions

of subsection (5), the Registrar may at any time require a copy of
the said register, or any part thereof.
(7) The said register shall also be produced at the

commencement of the annual general meeting of the company and
remain open and accessible during the continuance of the meeting
to any person attending the meeting.

subsection (7), the company and every officer of the company who
is in default shall be guilty of an offence and shall be liable to a fine
not exceeding five hundred rupees, and where default is made in
complying with the provisions of subsection (1) or subsection (2),
or where any inspection required under the provisions of this
section is refused or any copy required thereunder is not sent within
a reasonable time, the company and every officer of the company
who is in default shall be guilty of an offence and shall be liable to a
fine not exceeding five thousand rupees and further to a fine of two
hundred and fifty rupees for every day during which the default
continues.
(9) Where any inspection required under the provisions of

subsection (7) is refused unreasonably, the court may by order
compel an immediate inspection of the register.
12—A63752 (82/06)

(a) any person in accordance with whose directions or
instructions the directors of a company are accustomed to
act shall be deemed to be a director of the company ;
(b) a director of a company shall be deemed to hold or to have
an interest or right in or over, any shares or debentures, if
a body corporate other than the company holds them or
has that interest or right in or over them, and either—
(i) that body corporate or the directors are accustomed to act
in accordance with his directions or instructions ; or
(ii) he is entitled to exercise or control the exercise of one-
third or more of the voting power at any general
meeting of that body corporate.
199. (1) Any person who, immediately before the occurrence of Obligations of
persons to notify
an event is— company or
acquisition changes in
amounts of and
disposal of shares in
company.
(a) uninterested in shares comprised in the relevant share capital of a
company, and becomes, in consequence of the occurrence of that
event, interested in such shares; or
(b) interested in shares comprised in the relevant share capital of
such company of a nominal value of less than one-
tenth the nominal value of the share capital; or
(c) interested in shares comprised in the relevant share capital of
such company of a nominal value of not less than one-
tenth the nominal value of the share capital; or
(d) interested in shares comprised in the relevant share capital of
such company of a nominal value equal to one-tenth or more
of the nominal value of that share capital,
shall be under obligation to notify the company in writing of the

occurrence of the event (specifying it) and the date on which it
occurred and whether such occurrence had the
effect of increasing or decreasing the nominal value of the shares

comprised in that share capital, and whether according to the
circumstances of the case, the number of shares comprised in that
share capital (specifying it) in which immediately after the
occurrence of the event, he is interested in or the fact that
immediately thereafter, he is not interested in that share capital.
(2) In the case of an obligation imposed by the provisions of subsection (1)—
(a) if at the time of the occurrence of the event giving rise to the
obligation, the person so obliged has knowledge of such
event, such obligation shall be fulfilled within a period
of fourteen days from the date of occurrence of the
event; and
(b) if at the time of its occurrence, the person who becomes so
obliged has no knowledge of such obligation, he shall
fulfill such obligation within fourteen days from the date
on which the occurrence giving rise to such obligation
comes to his knowledge.
In reckoning such period of fourteen days, any day which is a

bank holiday or a public holiday shall be disregarded.
200. (1) In any accounts of a company laid before it at a general Particulars in

accounts of
meeting or in a statement annexed thereto, there shall, subject to directors’ salaries,
pensions, &c.
and in accordance with the provisions of this section, be shown so
far as the information is contained in the company's books and
papers or the company has the right to obtain it from the persons
concerned—
(a) the aggregate amount of the directors' emoluments;

(b) the aggregate amount of directors' or past directors'
pensions;
(c) the aggregate amount of any compensation to directors or
past directors in respect of loss of office; and
(d) the number of directors who have waived rights to receive
emoluments which, but for the waiver, would have fallen to
be included in the amount shown in those accounts under the
provisions of paragraph (a) and the aggregate amount of the
said emoluments.
(2) For the purposes of the provisions of paragraph (d) of

subsection (1)—
(a) it shall be assumed that a sum not receivable in respect of a

period would have been paid at the time at which it was due to be
paid;
(b) a sum not so receivable that was payable only on demand,
being a sum the right to receive which has been waived, shall be
deemed to have been due for payment at the time of waiver.
(3) The amount to be shown under the provisions of paragraph

(b) of subsection (1)—
(a) shall not include any pension paid or receivable under a

pension scheme if the amount is such that the contributions
therefrom are substantially adequate for the maintenance of
the scheme, but save as aforesaid shall include any pension
paid or recoverable in respect of any such services of a
director or past director of the company as are referred to in
subsection (2) whether to or by him or, on his nomination or
by virtue of dependence on or other connection with him, to
or by any other person; and
(b) shall distinguish between pensions in respect of services as
director, whether of the company or its subsidiary and other
pensions ;
and for the purposes of this section the expression "pension"

includes any superannuation allowance, superannuation gratuity or
similar payment, the expression "pension scheme" means a scheme
for the provision of pensions in respect of services as director or
otherwise which is maintained in whole or in part by means of
contributions, and the expression "contribution" in relation to a
pension scheme means any payment (including an insurance
premium) paid for the purposes of the scheme by or in respect of
persons rendering services in respect of which pensions will or may
become payable under the scheme, except that it does not include
any payment in respect of two or more persons if the amount paid in
respect of each of them is not ascertainable.
(4) The amount to be shown under the provisions of paragraph

(c) of subsection (1)—
(a) shall include any sums paid to or receivable by a director or

past director by way of compensation for the loss of office
as director of the company or for the loss, while director of
the company or on or in connection with his ceasing to be a
director of the company, or any other office in connection
with the management of the company's affairs or of any
office as director or otherwise in connection with
management of the affairs of any subsidiary thereof; and
(b) shall distinguish between compensation in respect of the
office of the director, whether of the company or its
subsidiary, and compensation in respect of other offices,
and for the purposes of this section references to compensation for

loss of office shall include sums paid as consideration for or in
connection with a person's retirement from office.
(5) The amounts to be shown under the provisions of each

paragraph of subsection (1)—
(a) shall include all relevant sums paid by or receivable from—

(i) the company; and
(ii) the company's subsidiaries; and
(iii) any other person,
except sums to be accounted for to the company or any of

its subsidiaries or, by virtue of the provisions of section
190, to past or present members of the company or any of
its subsidiaries or any class of those members and;
(b) shall distinguish, in the case of the amount to be shown

under the provisions of paragraph (c) of subsection (1),
between the sums respectively paid by or receivable from
the company, the company’s subsidiary and persons other
than the company and its subsidiaries.
(6) The amounts to be shown under this section for any financial
year shall be the sums receivable in respect of that year, whenever
paid, or, in the case of sums not receivable in respect of a period,
the sums paid during that year, so however, that where—
(a) any sums are not shown in the accounts for the relevant
financial year on the ground that the person receiving them is liable
to account therefor as referred to in the provisions of paragraph (a)
of subsection (5) but the liability is thereafter wholly or partly
released or is not enforced within a period of two years; or
(b) any sums paid by way of expense allowance are charged to
Sri Lanka income tax after the end of the relevant financial year,
those sums shall, to the extent to which the liability is released or

not enforced or they are charged as aforesaid, as the case may be,
shown in the first accounts in which it is practicable to show them
or in a statement annexed thereto, and shall be distinguished from
the amounts to be shown therein by virtue of the provisions of this
Act other than this section.
(7) Where it is necessary so to do for the purpose of making any

distinction required by the provisions of this section in any amount
to be shown thereunder, the directors may apportion any payments
between the matters in respect of which they have been paid or are
receivable in such manner as they think appropriate.
(8) Where in the case of any accounts the requirements of this

section are not complied with, it shall be the duty of the auditors of
the company by whom the accounts are examined to include in their
report thereon, so far as they are reasonably able to do so, a
statement giving the required particulars.
(9) In this section any reference to a company's subsidiary—

(a) in relation to a person who is or was, while a director of the
company, a director also, by virtue of the company's
nomination, direct or indirect, of any other body corporate,
shall, subject to the provisions of paragraph (b), include
that body corporate whether or not it is or was in fact the
company's subsidiary ; and
(B) SHALL FOR THE PURPOSES OF SUBSECTION (2) AND (3) BE TAKEN AS REFERRING TO
A SUBSIDIARY AT THE TIME THE SERVICES WERE RENDERED, AND FOR THE PURPOSES
OF SUBSECTION (4) BE TAKEN AS REFERRING TO A SUBSIDIARY IMMEDIATELY
BEFORE THE LOSS OF OFFICE AS DIRECTOR OF THE COMPANY.
Particulars in
accounts of
loans to officers,
&c. 201. (1) The accounts which, in pursuance of this Act, are to be
laid before every company at a general meeting shall, contain
particulars showing—
(a) the amount of any loans made during the company's financial
year to :—
(i) any officer of the company; or
(ii) any person who after the making of the loan, became
during, that year an officer of the company,
by the company or a subsidiary thereof or by any other person
under a guarantee from or on a security provided by the
company or a subsidiary thereof (including any such loans
which were repaid during that year) ; and
(b) the amount of any loans made in manner aforesaid to any
such officer or person as aforesaid at any time before the
company's financial year and outstanding at the expiration of
such financial year.
(2) The provisions of subsection (1) shall not require the

inclusion in the accounts of particulars of—
(a) a loan made in the ordinary course of its business by the
company or a subsidiary thereof, where the ordinary business
of the company, or, as the case may be, the subsidiary, includes
the lending of money; or
(b) a loan made by the company or a subsidiary thereof to an
employee of the company or subsidiary, as the case may be,
where the loan does not exceed twenty thousand rupees and is
certified by the directors of the company or subsidiary, as the
case may be, to have been made in accordance with any
practice adopted or to be adopted by the company or subsidiary
with respect to loans to its employees,
not being, in either case, a loan made by the company under a

guarantee from or on a security provided by, a subsidiary
thereof or a loan made by a subsidiary of the company under a
guarantee from or on a security provided by the company or
any other subsidiary thereof.
(3) Where in the case of any accounts referred to in subsection
(1), the requirements of the provisions of this section are not
complied with, it shall be the duty of the auditors of the
company by whom the accounts are examined to include in
their report on the balance sheet of the company, so far as they
are reasonably able to do so, a statement giving the required
particulars.
(4) Any reference in this section to a subsidiary shall be taken as
referring to a subsidiary at the end of the company's financial
year (whether or not a subsidiary at the date of the loan).
General duty to
make disclosure 202. (1) It shall be the duty of any director of a company to give
for purposes of
section 198, 200 notice to the company of such matters relating to himself as
and 201.
may be necessary for the purposes of sections 198, 200 and
201 except so far as it relates to loans made, by the company or
by any other person under a guarantee from or on a security
provided by the company, to an officer thereof.
(2) (a) Any notice given under the provisions of subsection (1)
for the purposes of section 198 shall be in writing and shall be
given within fourteen days from the day on which he knows of
the existence of such duty, where he had prior knowledge of
such interest or where he had no such prior knowledge within a
period of fourteen days from the date on which the existence of
such interest comes to his knowledge, and where such
knowledge is not indicated at a meeting of directors, the
director indicating it shall take reasonable steps to ensure that it
is taken up on the agenda and read at the next meeting of
directors held after such notice is given.
(b) In reckoning the period of fourteen days referred to in the
provisions of paragraph (a) any day which is a bank holiday or
a public holiday shall be disregarded.
(3) The provisions of subsection (1) shall apply—
(a) for the purposes of section 201, in relation to officers
other than directors; and
(b) for the purposes of sections 200 and 201, in relation to

persons who are or have at any time during the preceding
five years been officers,
as it applies in relation to directors.
(4) Any person who makes default in complying with the
preceding provisions of this section shall be guilty of an offence
and shall be liable to a fine not exceeding five hundred rupees.
Disclosure by
directors of 203. (1) It shall be the duty of a director of a company who is in
interests in
contracts.
any way, whether directly or indirectly, interested in a contract or
proposed contract with the company to make a declaration of the
nature of his interest at a meeting of the directors of the company.
(2) In the case of a proposed contract the declaration required by
the provisions of subsection (1) to be made by a director shall be
made at the meeting of the directors at which the question of
entering into the contract is first taken into consideration, or
where the director was not at the date of the meeting, interested in
the proposed contract, at the next meeting of the directors held
after he became so interested, and in a case where the director
becomes interested in a contract after it is made, such declaration
shall be made at the first meeting of the directors held after the
director becomes so interested.
(3) For the purposes of this section, a general notice given to the
directors of a company by a director to the effect that he is a
member of a specified company or firm and is to be regarded as
interested in any contract which may, after the date of the notice,
be made with that company or firm, shall be deemed to be a
sufficient declaration of interest in relation to any contract so
made:
Provided that no such notice shall be of effect unless it is given at a meeting

of the directors or the director concerned takes reasonable steps to ensure that
it is taken up on the agenda and read at the next meeting of the directors held
after such notice is given.
(4) Any director who fails to comply with the provisions of this section shall
be guilty of an offence and shall be liable to a fine not exceeding one
thousand rupees.
(5) Nothing in this section shall be taken to prejudice the
operation of any rule of law restricting directors of a company
from having any interest in contracts with the company.
Provisions as to
assignment of 204. Where in the case of any company provision is made by the
office by
directors.
articles or by any agreement entered into between any person and
the company for empowering a director or manager of the
company to assign his office as such to another person, any
assignment of office made in pursuance of the said provision
shall, notwithstanding anything to the contrary contained in the
said provision, be of no effect unless and until it is approved by a
special resolution of the company.
AVOIDANCE OF PROVISIONS IN ARTICLES

OR CONTRACTS RELIEVING OFFICERS
FROM LIABILITY
Provisions as
to liability of
officers and 205. Subject as hereinafter provided, any provision whether
auditors.
contained in the articles of a company or in any contract with a
company or otherwise, for exempting any director, manager, or
officer of the company, or any person (whether an officer of the
company or not) employed by the company as auditor from, or
indemnifying him against, any liability which by virtue of any
rule of law would otherwise attach to him in respect of any
negligence, default, breach of duty or breach of trust of which he
may be guilty in relation to the company shall be void:
Provided that—
(a) in relation to any such provision which is in force on the
appointed date, the provisions of this section shall have
effect only on the expiration of a period of six months
from that date; and.
(b) nothing in this section shall operate to deprive any person
of any exemption or right to be indemnified in respect of
anything done or omitted to be done by him while any
such provision was in force; and
(c) notwithstanding anything in this section, a company may in
pursuance of any such provision as aforesaid, indemnify
any such director, manager, officer or auditor against any
liability incurred by him in defending any proceedings,
whether civil or criminal, in which judgment is given in
his favour or in which he is acquitted or in connection
with any application made under the provisions of section
447 in which relief is granted to him by the court.
ARRANGEMENTS AND RECONSTRUCTIONS
Power to
compromise 206. (1) Where a compromise or arrangement is proposed,
with creditors
and members. between a company and its creditors or any class of them or
between the company and its members or any class of them, the
court may, on the application of the company or of any creditor or
member of the company, or, in the case of a company being
wound up, of the liquidator, order a meeting of the creditors or
class of creditors, or of the members of the company or class of
members, as the case may be, to be summoned in such manner as
the court directs, for the purpose of sanctioning such compromise
or arrangement.
(2) Where a majority in number representing three-fourths in
value of the creditors or class of creditors or members or class of
members, as the case may be, present and voting either in person
or by proxy at the meeting, agree to any compromise or
arrangement, the compromise or arrangement shall, if, sanctioned
by the court, be binding on all the creditors or the class of
creditors, or on the members or class of members, as the case may
be, and also on the company, or, in the case of a company in the
course of being wound up, on the liquidator and contributories of
the company.
(3) An order made under the provisions of subsection (2) shall
have no effect until a certified copy of the order has been
delivered to the Registrar for registration, and a copy of every
such order shall be annexed to every copy of the memorandum of
the company issued after the order has been made, or, in the case
of a company not having a memorandum, of every copy so issued
of the instrument constituting or defining the constitution of the
company.
(4) Where a company makes default in complying with the
provisions of subsection (3) the company and every officer of the
company who is in default shall be guilty of an offence and shall
be liable to a fine not exceeding two hundred and fifty rupees for
each copy in respect of which default is made.
(5) In this section and in section 207, the expression "company"
means any company liable to be wound up under this Act, and the
expression "arrangement" includes a reorganization of the share
capital of the company by the consolidation of shares of different
classes or by the division of shares into shares of different classes
or by both those methods.
Information as
to 207. (1) Where a meeting of creditors or any class of
compromise
with creditors creditors or of members or of any class of members is
and members.
summoned under the provisions of section 206, there shall—
(a) together with every notice summoning the meeting which
is sent to a creditor or member, be sent a statement explaining
the effect of the compromise or arrangement and in particular,
stating any material interest of the directors of the company,
whether as is directors or members or as creditors of the
company or otherwise, and the effect thereon of the
compromise or arrangement, in so far as it is different from the
effect on the like interests of other persons; and
(b) in every notice summoning the meeting which is given by
advertisement, be included either a statement as is referred to
in paragraph (a) or a notification of the place at which and the
manner in which creditors or members entitled to attend the
meeting may obtain copies of such a statement.
(2) Where the compromise or arrangement affects rights of

debenture holders of the company, the statement referred to
in paragraph (a) of subsection (1) shall give the like
explanation as respects the trustee of any deed for securing
the issue of the debentures as it is required to give as respects
the directors of the company.
(3) Where a notice given by advertisement includes a

notification that copies of a statement explaining the effect of
the compromise or arrangement proposed can be obtained by
creditors or members entitled to attend the meeting, every
such creditor or member shall, on making an application in
the manner specified by the notice, be furnished with a copy
of the statement by the company free of charge.
(4) Where a company makes default in complying with any

requirement of the provisions of this section, the company
guilty of an offence and shall be liable to a fine not exceeding
five thousand rupees, and for the purposes of this subsection
any liquidator of the company and any trustee of a deed for
securing issue of debentures of the company shall be deemed
to be an officer of the company :
Provided that a person shall not be liable under the provisions of this
subsection if that person shows that the
default was due to the refusal of any other person, being a

director or trustee for debenture holders, to supply the necessary
particulars as to his interests.
(5) It shall be the duty of any director of the company and of any
trustee for debenture holders of the company to give notice to the
company of such matters relating to himself as may be necessary
for the purposes of this section, and any person who makes
Provisions for default in complying with the provisions of this subsection shall
facilitating
reconstruction be guilty of an offence and shall be liable to a fine not exceeding
and
amalgamation of five hundred rupees.
companies.
208. (1) Where an application is made to the court under the

provisions of subsection (1) of section 206 for the sanctioning of
a compromise or arrangement proposed between a company and
any such persons as are mentioned in that section, and it is shown
to the court that the compromise or arrangement has been
proposed for the purposes of or in connection with a scheme for
the reconstruction of any company or companies or the
amalgamation of any two or more companies, and that under the
scheme the whole or any part of the undertaking or the property
of any company concerned in the scheme (in this section referred
to as a "transferor company") is to be transferred to another
company (in this section referred to as the "transferee
company"), the court may, either by the order sanctioning the
compromise or arrangement or by any subsequent order, make
provision for all or any of the following matters:—
(a) the transfer to the transferee company of the whole or any
part of the undertaking and of the property or liabilities
of any transferor company ;
(b) the allotting or appropriation by the transferee company
of any shares, debentures, policies, or other like
interests in that company which under the compromise
or arrangement are to be allotted or appropriated by that
company to or for any person ;
(c) the continuation by or against the transferee company of
any legal proceedings pending by or against any
transferor company;
(d) the dissolution, without winding up, of any transferor
company;
(e) the provision to be made for any persons, who within such time and in
such manner as the court directs, dissent from the compromise or
arrangement;
(f) such incidental, consequential and supplemental matters, as are

necessary to secure that the reconstruction or amalgamation shall be
fully and effectively carried out.
(2) Where an order under the provisions of this section provides for the
transfer of property or liabilities, by virtue of the order that property shall
be transferred to and vest in, and those liabilities shall be transferred to and
become the liabilities of, the transferee company, and in the case of any
property, where the order so directs, freed from any charge which is by
virtue of the compromise or arrangement to cease to have effect.
(3) Where an order is made under the provisions of this section, every
company in relation to which the order is made, shall cause a certified copy
of such order to be delivered to the Registrar for registration within
fourteen days from the date of the order, and where default is made in
complying with the provisions of this subsection, the company and every
officer of the company who is in default shall be guilty of an offence and
shall be liable to a default fine.
(4) In this section the expression "property" includes property, rights and
powers of every description, and the expression "liabilities" includes
duties.
(5) In this section the expression "company" does not include any
company other than a company within the meaning of this Act.
Power to acquire
shares of 209. (1) Where a scheme or contract involving transfer of shares or any
shareholders
dissenting from class of shares in a company (in this section referred to as "the transferor
scheme or
contract approved
by majority.
company") to another company, whether a company within the meaning of
this Act or not (in this section referred to as "the transferee company") has,
within four months from the date of making of the offer in that behalf by
the transferee company, been approved by the holders of not less than nine-
tenths in value of the shares whose transfer is involved (other than shares
already held at the date of the offer by, or by a nominee for, the transferee
company or its subsidiary), the transferee company may, at any time within
two months from the date of expiration of such four months, give notice in
the prescribed manner to any dissenting shareholder that it desires to
acquire his shares, and when such a notice is
given the transferee company shall, unless on an application

made by the dissenting shareholder within one month from the
date on which the notice was given the court thinks fit to order
otherwise, be entitled and bound to acquire those shares on the
terms of which, under the scheme or contract, the shares of the
approving shareholders are to be transferred to the transferee
company:
Provided that where shares in the transferor company of the
same class or classes as the shares whose transfer is involved are
already held as aforesaid to a value greater than one-tenth of the
aggregate of their value and that of the shares (other than those
already held as aforesaid) whose transfer is involved, the
preceding provisions of this subsection shall not apply unless—
(a) the transferee company offers the same terms to all holders
of the shares (other than those already held as aforesaid)
whose transfer is involved, or, where those shares
include shares of different classes, of each class of them;
and
(b) the holders who approve the scheme or contract, besides
holding not less than nine-tenths in value of the shares
(other than those already held as aforesaid) whose
transfer is involved, are not less than three-fourths in
number of holders of those shares.
(2) Where, in pursuance of any such scheme or contract as is

referred to in subsection (1), shares in a company are transferred
to another company or its nominee, and those shares, together
with any other shares in the first-mentioned company held by, or
by a nominee for, the transferee company or its subsidiary at the
date of the transfer comprise or include nine-tenths in value of
the shares in the first-mentioned company or of any class of such
shares, then—
(a) the transferee company shall within one month from the
date of the transfer (unless on a previous transfer in
pursuance of the scheme or contract it has already
complied with this requirement) give notice of that fact
in the prescribed manner to the holders of the remaining
shares or of the remaining shares of that class as the
case may be, who have not assented to the scheme or
contract ; and
(b) any such holder may within three months from the date of
giving of the notice to him require the transferee
company to acquire the shares in question,
and where a shareholder gives notice under the provisions of
paragraph (b) with respect to any shares, the transferee company
shall be entitled and bound to acquire those shares on the terms
on which under the scheme or contract the shares of the
approving shareholders were transferred to it, or on such other
terms as may be agreed or as the court on the application of
either the transferee company or the shareholder thinks fit to
order.
(3) Where a notice has been given by the transferee company

under the provisions of subsection (1) and the court has not, on
an application made by the dissenting shareholder, made an
order to the contrary, the transferee company shall, on the
expiration of one month from the date on which the notice has
been given, or, if an application to the court by the dissenting
shareholder is then pending, one month from the date on which
that application has been disposed of, transmit a copy of the
notice to the transferor company together with an instrument of
transfer executed on behalf of the shareholder by any person
appointed by the transferee company and on its behalf by the
transferee company, and pay or transfer to the transferor
company the amount of other consideration representing the
price payable by the transferee company for the shares which by
virtue of the provisions of this section that company is entitled to
acquire, and the transferor company shall thereupon register the
transferee company as the holder of those shares:
Provided that an instrument of transfer shall not be required for any share
for which a share warrant is for the time being outstanding.
(4) Any sum received by the transferor company under the

provisions of this section shall be paid into a separate bank
account, and any such sums and any other consideration so
received shall be held by that company on trust for the several
persons entitled to the shares in respect of which the said sums
or other consideration were respectively received as referred to
in subsection (1).
(5) In this section the expression "dissenting shareholder"

includes a shareholder who has not assented to the scheme or
contract and any shareholder who has failed or refused to
transfer his shares to the transferee company in accordance with
the scheme or contract.
(6) In relation to an offer made by the transferee company to
shareholders of the transferor company before the appointed date
the provisions of this section shall have effect—
(a) with the substitution, in subsection (1), for the words "the
shares whose transfer is involved (other than shares
already held at the date of the offer by, or by a nominee
for, the transferee company or its subsidiary)", of the
words "the shares affected" and with the omission of the
proviso to that subsection ;
(b) with the omission of subsection (2) ; and
(c) with the omission, in subsection (3), of the words "to-
gether with an instrument of transfer executed on behalf
of the shareholder by any person appointed by the
transferee company and on its own behalf by the
transferee company "and of the proviso to that
subsection.
PREVENTION OF OPPRESSION AND

MISMANAGEMENT
Oppression
210. (1) Any member or members of a company or a person on

whom shares have devolved through the death of a member
having complaint that the affairs of a company are being
conducted in a manner oppressive to any member or members or
a person on whom shares have devolved through the death of a
member (including the member or members or such person with
such complaint) may make an application to the District Court of
the district in which the registered office of the company is
situate for an order under the provisions of this section, where
such member has, or such members have, or such person on
whom shares have devolved through the death of a member has,
under the provisions of section 214, a right to make such an
application.
(2) Where, on any application made under the provisions of
subsection (1), the court is of opinion that the affairs of a
company are being conducted in a manner oppressive to any
member or members or a person on whom shares have devolved
through the death of a former member the court may, with a
view to remedying the matters complained of, make such order
as it thinks fit.
13—A 63752 (82/06)
Mismanagementnt
211. (1) Any member or members of a company having a complaint
—
(a) that the affairs of the company are being conducted in a
manner prejudicial to the interests of the company ; or
(b) that a material change (not being a change brought about
by, or in the interests of, any creditors including
debenture holders, or any class of shareholders, of the
company) has taken place in the management or control
of the company whether by an alteration in its board of
directors, or of its agent or secretary, or in the
constitution or control of the firm or body corporate
acting as its agent or secretary or in the ownership of
the shares of the company, or where it has no share
capital in its membership or in any other manner
whatsoever, and that by reason of such change, it is
likely that the affairs of the company may be conducted
in a manner prejudicial to the interests of the company,
may make an application to the District Court of the district in
which the registered office of the company is situate for an order
under the provisions of this section, where such member has, or
such members have, or such person on whom shares have
devolved through the death of a member have, under the
provisions of section 214, a right to make such an application.
(2) Where, on any application made under the provisions of
subsection (1), the court is of opinion that the affairs of the
company are being conducted as referred to in subsection (1) or
that by reason of any material change as referred to in that
subsection in the management or control of the company it is
likely that the affairs of the company will be conducted as
aforesaid, the court may, with a view to remedying or preventing
the matters complained of or apprehended, make such order as it
thinks fit.
Procedure.
212. Every application under the provisions of section 210 or
section 211 shall be made by way of summary procedure and
every party who is sought to be affected by the order shall be
named a respondent in the petition.
Interim orders by 213. (1) Pending the making by it of a final order under the
court.
provisions of section 210 or section 211 the court may, on the
application of a party to the proceedings, make an interim order
including a restraining order which it thinks fit for regulating
the conduct of the company's affairs upon such terms and
conditions as appear to it to be just and equitable.
(2) An application for an interim order under the provisions of

subsection (1) shall be made by petition supported by affidavit
and every party who is sought to be affected by the order shall
be named a respondent in the petition. Such order shall be made
ex parte or after notice to the respondent at the discretion of the
court
(3) A respondent to the petition referred to in subsection (2)

may in like manner make an application for an order of
revocation or variation of the ex parte order.
Who may make

an application to 214. (1) The following member or members of a company or a
court.
person on whom shares have devolved through the death of a
member has or shall have the right to make an application under
the provisions of section 210 or section 211, as the case may be :
—
(a) in the case of a company having a share capital, not less
than five per centum of the total number of its members
or the holders of not less than the aggregate of five per
centum in the nominal value of the company's issued
capital; or
(b) in the case of a company not having a share capital, a
number of members less than twenty per centum of the
company's members.
(2) For the purposes of subsection (1), where any shares are held
by two or more persons jointly such persons shall be counted
only as one member.
(3) Where several members of a company are entitled to make

an application in accordance with the provisions of subsection
(1) any one or more of them having obtained the consent in
writing of the remaining members may make the application on
behalf and for the benefit of all of them.
(4) The executor or administrator of a deceased member shall be
deemed to be a member of a company for the purposes of
sections 210 and 211.
(5) Where at the conclusion of an inquiry under the provisions of

section 210 or section 211 the court holds that the member or
members of the company or a person on
whom shares have devolved through the death of a member

making the application has or have done so vexatiously or
without reason or probable cause, the court may in addition
to any award of costs against such member or members or a
person on whom shares have devolved through the death of a
former member have the discretion to direct that such
member or members shall be disqualified from being
appointed as a director or agent or secretary or manager of
the company for a period not exceeding five years from the
date of the order to be fixed by court or direct that the
member or members or such person shall not have the right
to convene or requisition any meeting of the company or
Power of
court to act have the right to be present in person or by proxy at any
under section
210 or section
211 during meeting of the company within the aforesaid period, or to
winding-up
proceedings. vote upon a show of hands or at a poll by person or by proxy
at such meeting.
215. Notwithstanding the provisions of Part IX, at any
Powers of
stage of the winding-up proceedings in respect of a
court on
application company, where a court is of the opinion that to wind up the
under
section 210 or company would be prejudicial to the interests of a member
section 211.
of the company, it shall be lawful for the court to act under
the provisions of section 210 or section 211 in like manner
as if an application has been made to court under the
provisions of either of those two sections.
216. Without prejudice to the generality of the powers of

the court conferred by section 210 or section 211, any order
made under the provisions either of such sections may
provide for—
(a) the regulation of the conduct of the company's affairs
in future;
(b) the purchase of the shares or interests of any members
of the company by other members thereof or by the
company ;
(c) in the case of a purchase of shares by the company as
aforesaid, the consequent reduction of its share
capital;
(d) the termination, setting aside or modification of any
agreement, however arrived at, between the company
on the one hand, and any of the followmg persons, on
the other, namely—
(i) the managing director,
(ii) any other director,
(iii) the board of directors,
165 Companies Act, No. 17 of. 1982
(iv) the agent or secretary, or

(v) the manager,
upon such terms and conditions as may, in the opinion
of the court, be just and equitable in all the
circumstances of the case;
(e) the termination, setting aside or modification of any
agreement between the company and any person not
referred to in paragraph (d) upon such terms and
conditions as may, in the opinion of the court, be just
and equitable in all the circumstances of the case but
always so that no such agreement shall be terminated,
set aside or modified except after due notice to the
party concerned and his being heard;
(f) the setting aside of any transfer, delivery of goods
payment, execution or other act relating to property
made or done by or against the company within the
three months immediately prior to the date of the
application or the commencement of winding-up
proceedings, as the case may be, which would, if made
or done by or against an individual, be deemed in a
case of his insolvency to be fraudulent preference; and
(g) any other matter for which in the opinion of the
court it is just and equitable that provision should be
made.
Effect of
alteration of 217. (1) Where an order under the provisions of section 210
memorandum
or articles of
or section 211 makes any alteration in the memorandum or
company by articles of a company, then, notwithstanding any other
order under
section 210 or provision of this Act, the company shall not have power,
section 211.
except to the extent, if any, permitted in the order, to make
without the leave of the court, any alteration whatsoever
which is inconsistent with the order either in the memorandum
or in the articles.
(2) Subject to the provisions of subsection (1), the
alterations made by the order shall, in all respects, have the
same effect as if they had been duly made by the company in
accordance with the provisions of this Act, and the said
provisions shall apply accordingly to the memorandum or
articles so altered.
(3) A certified copy of every order altering, or giving leave to

alter, a company's memorandum or articles, shall within fifteen
days after the making of such order, be filed by the company
with the Registrar who shall register the same.
(4) Where default is made in complying with the provisions

of subsection (3), the company, and every officer of the
company who is in default, shall be guilty of an offence and
shall be liable to a fine not exceeding two hundred and fifty
rupees for every day during which the default continues.
Addition of
respondents to 218. Where the managing director or any other director, the
application under
section 210 or
section 211. agent or secretary or the manager, of a company or any other
person who has not been impleaded as a respondent to any
application made under the provisions of section 210 or section
211, applies to be added as a respondent to such application, the
court shall, where it is satisfied that there is sufficient cause for
doing so, direct that he may be added as a respondent
accordingly.
Consequences of
termination or 219. (1) Where an order of a court made under the provisions
modification of
certain agreements.
of section 210 or section 211 terminates, sets aside, or modifies
an agreement such as is referred to in paragraph (d) or paragraph
(e) of section 216—
(a) the order shall not give rise to any claim whatsoever against
the company by any person for damages or for compensation for
loss of office or in any other respect, either in pursuance of the
agreement or otherwise; and
(b) no managing director or other director, agent, secretary or
manager whose agreement is so terminated or set aside and no
person who, at the date of the order terminating or setting aside
the agreement was, or subsequently becomes, an associate of
such agent or secretary shall, for a period of five years from the
date of the order terminating the agreement, be appointed, or act,
as the managing director or other director, agent, secretary, or
manager of the company, unless with the leave of the court.
(2) (a) Any person who knowingly acts as a managing director

or other director, agent or secretary or manager of a company in
contravention of the provisions of paragraph (b) of subsection (1)
shall be guilty of an offence and shall
be liable to a fine not exceeding five thousand rupees or to

imprisonment of either description for a term not exceeding six
months or to both such fine and imprisonment.
(b) Where an offence under the provisions of this section is
committed by a body of persons—
(i) if the body of persons is a body corporate, every director
and officer of that body corporate shall be deemed to be
guilty of such offence ; and
(ii) if the body of persons is a firm, every partner of the firm
shall be deemed to be guilty of such offence:
Provided that no such person shall be deemed to be guilty of
such offence, if he proves that the offence was committed
without his knowledge or that he exercised all due diligence to
prevent the commission of the offence.
PART V
insider dealing
Prohibition
on stock 220. (1) Subject to the provisions of subsection (8), an
exchange
deals by individual who is, or at any time during the six months
insiders, &c.
immediately preceding the date of coming into operation of this
Part has been, knowingly connected with a company shall not
deal on a recognized stock exchange in securities of that
company if he has information, which—
(a) he holds by virtue of being connected with the company;
(b) it would be reasonable to expect a person so connected and in the

position by virtue of which he is so connected not to disclose except for the
proper performance of the functions attaching to that position; and
(c) he knows is unpublished price sensitive information in
relation to those securities.
(2) Subject to the provisions of subsections (8) and (10), an

individual who is or at any time in the six months immediately
preceding the date of coming into operation of this Part has been
knowingly connected with a company shall not deal on a
recognized stock exchange in securities of any other company if
he has information which—
(a) he holds by virtue of being connected with the first-
mentioned company;
(b) it would be reasonable to expect a person so connected and

in the position by virtue of which he is so connected to
disclose except for the proper performance of the
functions attaching to that position;
(c) he knows is unpublished price sensitive information in
relation to those securities of that other company ;
and
(d) relates to any transaction whether actual or contemplated,
involving both the first-mentioned company and that other
company or involving one of them and securities of the other or
to the fact that any such transaction is no longer contemplated.
(3) Subject to the provisions of subsections (8) and (10),

where—
(a) any individual has information which he knowingly
obtained, whether directly or indirectly, from another
individual who is connected with a particular company,
or was at any time in the six months immediately
preceding the date of obtaining of the information so
connected and who the former individual knows or has
reasonable cause to believe, held the information by
virtue of being so connected; and
(b) the former individual knows or has reasonable cause to
believe that, because of the latter's connection and
position, it would be reasonable to expect him not to
disclose the information except for the proper
performance of the functions attaching to that position,
then, the former individual-—
(i) shall not himself deal on a recognized stock exchange
in securities of that company if he knows that the
information is unpublished price sensitive
information in relation to those securities; and
(ii) shall not himself deal on a recognized stock
exchange in securities of any other company if he
knows that the information is unpublished price
sensitive information in relation to those securities
and it relates to any transaction whether actual or
contemplated, involving the first-mentioned
company and the other company or involving one of them and securities of
the other or to the fact that any such transaction is no longer contemplated.
(4) Subject to the provisions of subsections (8) and (10), where

an individual is contemplating, or has contemplated, making,
whether with or without another person, a takeover offer for a
company in a particular capacity, that individual shall not deal
on a recognized stock exchange in securities of that company in
another capacity if he knows that the information that the offer
is contemplated or is no longer contemplated is unpublished
price sensitive information in relation to those securities.
(5) Subject to the provisions of subsections (8) and (10), where

an individual has knowingly obtained, whether directly or
indirectly, from an individual to whom the provisions of
subsection (4) apply, information that the offer referred to in
subsection (4) is being contemplated or is no longer
contemplated, the first-mentioned individual shall not himself
deal on a recognized stock exchange in securities of that
company if he knows that the information is unpublished price
sensitive information in relation to those securities.

individual who is for the time being prohibited by any provision
of this section from dealing on a recognized stock exchange in
any securities shall not counsel or procure any other person to
deal in those securities, knowing or having reasonable cause to
believe that that person would deal in them on a recognized
stock exchange.

individual who is for the time being prohibited as aforesaid from
dealing on a recognized stock exchange in any securities by
reason of his having any information, shall not communicate
that information to any other person if he knows or has
reasonable cause to believe that that or some other person will
make use of the information for the purpose of dealing, or of
counselling or procuring any other person to deal, on a
recognized stock exchange in those securities.
(8) The provisions of this section shall not prohibit an individual

by reason of his having any information from—
(a) doing any particular thing otherwise than with the view to
the making of a profit or the avoidance of a loss,
whether for himself or another person, by the use of that
information;
(b) entering into a transaction in the course of the exercise in

good faith of his functions as liquidator, receiver or
trustee in bankruptcy; or
(c) doing any particular thing if the information—
(i) was obtained by him in the course of the business of
a jobber in which he was engaged or employed;
and
(ii) was of a description which it would be reasonable to
expect him to obtain in the ordinary course of that
business,
and he does that thing in good faith in the course of that
business.
(9) In subsection (8), "jobber" means an individual, partnership

or company dealing in securities on a recognized stock
exchange.
(10) An individual shall not, by reason only of having

information relating to any particular transaction, be prohibited
—
(a) by the provisions of subsection (2), paragraph (ii) of
subsection (3), subsection (4) or subsection (5) from
dealing on a recognized stock exchange in any
securities; or
(b) by the provisions of subsection (6) or subsection (7) from
doing any other thing in relation to securities which he
is prohibited from dealing in by any of the provisions
referred to in paragraph (a),
if he does that thing in order to facilitate the completion or
carrying out of the transaction.
(11) Where a trustee or legal representative, or, where a trustee

or legal representative is a body corporate, an individual acting
on behalf of that trustee or legal representative, who, apart from
the provisions of paragraph (a) of subsection (8) would be
prohibited by the provisions of this section from dealing, or
counselling or procuring any other person to deal, in any
securities, deals in those securities, or counsels or procures any
other person to deal in them, he shall be presumed to have acted
as referred to in that paragraph if he acted on the advice of a
person who—
(a) appeared to him to be an appropriate person from whom
to seek such advice; and
(b) did not appear to him to be prohibited by this section from
dealing in those securities.
Prohibition on
abuse of 221. (1) The provisions of this section shall apply to any
information
obtained in information which—
official capacity.
(a) is held by a public servant or former public servant by virtue
of his position or former position as a public servant or is
knowingly obtained by an individual (directly or indirectly)
from a public servant or former public servant who he knows or
has reasonable cause to believe, held the information by virtue
of any such position;
(b) it would be reasonable to expect an individual in the position
of the public servant or former position of the former public
servant not to disclose except for the proper performance of the
functions attaching to that position ; and
(c) the individual holding it knows, is unpublished price
sensitive information in relation to securities of a particular
company (hereafter in this section referred to as "relevant
securities").
(2) The provisions of this section shall apply to a public

servant or former public servant holding information to which
this section applies and to any individual who knowingly
obtained any such information (directly or indirectly) from a
public servant or former public servant who, that individual
knows or has reasonable cause to believe, held the information
by virtue of his position or former position as a public servant.
(3), An individual to whom the provisions of this section

apply—
(a) shall not deal on a recognized stock exchange in any
relevant securities;
(b) shall not counsel or procure any other person to deal in
any such securities, knowing or having reasonable
cause to believe that that other person would deal in
them on a recognized stock exchange ; and
(c) shall not communicate to any other person the information
held or, as the case may be, obtained by him as referred
to in subsection (2) if he knows or has reasonable cause
to believe that that or some other person will make use
of that information for the purpose of dealing or of
counselling or procuring any other person to deal, on a
recognized stock exchange in any such securities.
172 Companies Act, No. 17 of l982
(4) An individual shall not, by reason only of having

information relating to a particular transaction, be prohibited
by any provision of this section from doing anything, if he does
that thing in order to facilitate the completion or carrying out of
the transaction.
Penalty for 222. (1) An individual who contravenes the provisions

contravention
of the
provisions of
of section 220 or section 221 shall be liable—
section 220 or
section 221. (a) on conviction on indictment to imprisonment for a
term not exceeding ten years or a fine not exceeding fifty
thousand rupees or to both such imprisonment and fine;
(b) on conviction after summary trial before a Magistrate
to imprisonment for a term not exceeding two years or a fine
not exceeding twenty-five thousand rupees or to both such
imprisonment and fine.
Interpretation of (2) No transaction shall be void or voidable by reason only
this Part.
that it was entered into in contravention of the provisions of
section 220 or section 221.
223. (1) For the purposes of this Part, an individual is

connected with a company if, and only if—
(a) he is a director of that company or a related company ;
or
(b) he occupies a position as an officer (other than director)
or employee of that company or a related company or a
position involving a professional or business relationship
between himself (or his employer or a company of which he is
a director) and the first company or a related company which in
either case may reasonably be expected to give him access to
information which, in relation to securities of either company,
is unpublished price sensitive information, and which it would
be reasonable to expect a person in his position not to disclose
except for the proper performance of his function.
(2) Any reference in this Part to unpublished price sensitive
information in relation to any securities of any company is a
reference to information which—
(a) relates to specific matters relating, or of concern,
(directly or indirectly) to that company that is to say, is not of a
general nature relating or of concern to that company ; and
173 Companies Act,
No. 17 of 1982
(b) is not generally known to those persons who are

accustomed or would be likely to deal in those securities but
which would if it were generally known to them be likely to
affect materially the price of those securities,
(3) For the purposes of this Part a person deals in securities
if (whether as principal or agent) he buys or sells or agrees to
buy or sell any securities and references in this Part to dealing
in securities on a recognised stock exchange shall include
references to dealing in securities through an investment
exchange.
(4) In this Part except where the context otherwise
requires— "company" means, any company
within the meaning of this Act or
not;
"debenture" has the same meaning in relation to companies
which were not incorporated under this Act as it has
in relation to companies which were so incorporated;
"investment exchange" means an organization maintaining
a system whereby an offer to deal in securities made
by a subscriber to the organization is communicated,
without his identity being revealed, to other
subscribers to the organization, and whereby any
acceptance of that offer by any of those other
subscribers is recorded and confirmed;
"listed securities", in relation to a company, means any
securities of the company listed on a recognized stock
exchange;
"public servant" means an individual who holds office
under, or is employed by, the Republic ;
"recognized stock exchange" means a stock exchange
recognized as such by or under any written law;
"related company", in relation to any company, means
any body corporate which is that company's
subsidiary or holding company, or a subsidiary of that
company's holding company;
"securities" means listed securities, and in the case of a
company means any shares, any debentures or any
right to subscribe for, call for or make delivery of a
share or debenture ;
"share" has the same meaning in relation to companies
which were not incorporated under this Act as it has
in relation in companies which were so incorporated;
and :
"take-over offer for a company" means an offer made to all

the holders (or all holders other than the person making
the offer and his nominees) of the shares in the
company to acquire those shares or a specified
proportion of them, or to all the holders, or all the
holders other than the person making the offer and his
nominees, of a particular class of those sharer to acquire
the shares of that class or specified proportion of them.
PART VI
WHEN PRIVATE COMPANIES SHALL BECOME PUBLIC
LIMITED LIABILITY COMPANIES
Registrar to
issue show 224. (1) Where it appears to the Registrar that, in the national
cause notice.
interest or in the interest of the national economy, a private
limited liability company should be called upon to offer a
proportion of its shares to the public he shall issue a notice to
such company to show cause why it should not become a public
limited liability company under the provisions of this Part.
(2) After the issue of notice under subsection (1), no company shall
register any transfer of its shares or make any issue of its shares, save and
except any transfer resulting upon the operation of law, so as to defeat the
provisions of this Part.
(3) After the issue of notice under subsection (1), no

resolution for the winding up, or an application to the court for
the winding up of the company or any subsidiary thereof shall
be passed by the company or made to the court.
Consequenc-
es of show 225. Upon receipt of a notice under the provisions of section
cause
notice. 224, the company shall, within thirty days from the date of
receipt of the notice or before the expiration of such extended
time as may be granted by the Registrar in his discretion, notify
the Registrar in writing either that it consents to become a
public limited liability company or that it refuses for good
cause to become a public limited liability company and where it
so refuses shall state its reasons therefor.
Consequen
-ces
226. (1) The Registrar shall on receipt of the notification
of private
company from the company request the company, where such company
consenting
or refusing has consented to become a public limited liability company,
to become
public to state the period of time, not exceeding six months from the
limited
liability
company.
date of such request or before the expiration of such extended
time as may be granted by the Registrar in his discretion
within which it will become a public limited liability
company, the number of shares it proposes to offer to the
public and submit an outline of the steps the company
proposes to take in regard thereto.
(2) The Registrar shall confirm the proposals made in that

behalf by the company subject to such variation as the
Registrar may, having regard to the circumstances, impose,
and direct the company accordingly.
(3) Where the company notifies the Registrar of its refusal to

become a public limited liability company, or where the
Any person number of shares the company proposes to offer to the public
in the
national is in the opinion of the Registrar inadequate, the Registrar
interest to
request
Registrar
shall thereupon refer the matter to the District Court within
to call
upon whose jurisdiction the registered office of the company is
private
company situate for adjudication as to whether or not the company
to become
public. should become a public limited liability company, and if so,
the proportion of shares it should offer to the public.
Form of
reference
to court. 227. Any person may, giving adequate reasons in writing,
request the Registrar to call upon a private limited liability
company to become a public limited liability company and
the Registrar on the receipt of such a request may, where he is
satisfied that it is in the national interest or
in the interest of the national economy to do so, take steps as
provided in section 224 and the provisions of sections 225
and 226 shall apply, as the case may be.
228. (1) Any reference to court by the Registrar under the
provisions of section 226 or section 227 of any matter shall be
in the form of a petition setting out such facts and
circumstances as are available for the adjudication of the
matter. The Registrar may annex to such petition such docu-
ments as he may deem necessary or relevant.
(2) On receipt of the petition of the Registrar under the

provisions of subsection (1), the court shall issue notice on
the company to show cause why the company should not
become a public limited liability company under the provi-
sions of this Part.
(3) The company shall upon receipt of the notice referred to

in subsection (1), file a statement of objections and the court
shall thereupon fix a date for hearing and adjudication of the
matter. The court shall give any matter referred to court under
the provisions of section 226 or section 227 by the Registrar
priority over other cases listed before it and dispose of such
matter with the least possible delay. The court shall have
power to summon witnesses and hear evidence as in civil
suits and rules of procedure applicable to civil suits shall with
such modifications as the court deems necessary, apply to any
matter so referred to court.
(4) The adjudication by the court of any reference made to it

under the provisions of section 226 or section 227 may be
subject to such terms and conditions as the court may impose,
and the court may, if it considers it necessary in the
circumstances, give such directions, including directions for
the alteration of the company's memorandum of association
and articles of association, the alteration or variation of the
share capital of the company and the proportion of the shares
that should be offered to the public.
(5) Notwithstanding any adjudication made by the court

under subsection (4), the Registrar shall be entitled at any
time to make any application to the court to review and revise
any order made by such court under the aforesaid subsection.
Effect of direction
or adjudication. 229. Upon the direction by the Registrar or adjudication by
the court that a private limited liability company shall be
converted into a public limited liability company, such
company shall be deemed to be a public limited liability
company notwithstanding any other provisions of this Act ;
and accordingly the provisions of this Act applicable to public
limited liability companies shall apply to such company.
Offences and
penalties. 230. Where any company contravenes or fails to comply
with any of the provisions of this Part or of any direction
given by the Registrar or any direction or order given by the
court, the company and every officer or agent of the company
who knowingly and wilfully authorizes or permits such
contravention or non-compliance shall be guilty of an offence
and shall be liable to a fine not exceeding ten thousand rupees
or to imprisonment for a term not exceeding two years or to
both such fine and imprisonment.
PART VII
PROVISIONS AS TO PEOPLE’S
COMPANIES
Value of
each
231. The nominal value of each share in a people's
share.
company shall not exceed ten rupees.
Limitation on
maximum 232. No person shall either individually or together with his
shareholding.
wife or minor child or children hold, either directly or
through nominees, more than ten per centum of the issued
share capital of a people's company:
Provided, however, that the State shall be entitled to be a
shareholder, capable of holding unrestricted share capital.
The State shall be deemed to be a corporation for purposes
of representation.
Manner of 233. Any person may invest in one or more shares of a

investment.
people's company at any allotment of shares by the com-
pany or by purchase.
Number of
directors. 234. There shall be three or more directors of a peoples
company, each holding one or more shares.
Election of 235. The directors of a people's company shall be elected

directors.
by the shareholders and they shall retire every year, and be
eligible for re-election at an annual general meeting.
Limitation on
directors.
236. No director of one people's company shall hold the
office of director of any other people's company.
Exclusion of 237. No company shall hold any share in any people's

other
companies
from company either directly or through nominees save and
holding
shares in a
people's
company.
except any other people's company within the meaning of
this Act.
Taxation.
238. A people's company shall be subject to such rates of
income tax under the law for the time being relating to
income tax.
14—A63752 (82/06)
178 Companies Act No.17 of 1982
Provisions 239. Subject to the provisions of this Part, the provisions of this
applicable to a
public
company to
Act applicable to public companies shall apply to a people's
apply to a
people's company.
company.
When a
people's
company shall
be
deemed to be
public 240. Where at any time the number of persons constituting the
company or a
private membership of a people's company is reduced to below fifty and
company.
remains below fifty for a period or more than six months, such
company shall cease to be a people's company and shall be
deemed for all purposes to be a public company within the
meaning of this Act and where such number is reduced to below
seven such company shall be deemed to be a private company
and the provisions of this Act relating to public companies or
private companies, as the case may be, shall apply.
Company
incorporated
for business
outside Sri PART VIII
Lanka.
PROVISIONS RELATING TO OFF-SHORE
COMPANIES
241. (1) Subject to the provisions hereinafter contained any

company may make an application to the Registrar to be
registered in Sri Lanka as an off-shore company and to be so
referred to and in the case of a company incorporated abroad
deemed to be continued in Sri Lanka as if it had been
incorporated under the provisions of this Act.
(2) An application for registration made by the company under

the provisions of subsection (1) shall have annexed thereto the
following documents for registration—
(a) a certified copy of the charter, statutes or memorandum
and articles of association of the company, or other
instrument constituting or defining the constitution of
the company, and, where such instrument is not in the
official language of Sri Lanka, in such language as may
be specified by the Registrar;
(b) a list of the directors or those managing the affairs of the
company, containing their full names, addresses,
occupations and offices they hold in the company;
(c) the names and addresses of the persons resident in, and
being a citizen of, Sri Lanka, authorized to represent
the company;
(d) a statement containing the full address of—

(i) the registered or principal office of the company in the
country of incorporation ; and
(ii) the principal place of business of the company in Sri Lanka;
(e) a certified copy, certified of recent date, of the incorporation
of the company.
The company shall also notify the Registrar of any amendments

or alterations in respect of any of the aforesaid particulars within
the prescribed time, and in the prescribed form.
Grant of 242. (1) Subject to the provisions of subsection (2), the Registrar
certificate of
registration to
off-shore
may, having regard to the national interest, or in the interest of
company.
the national economy, issue a certificate of registration to an off-
shore company for the carrying on of its business outside the
shores of Sri Lanka where such off-shore company—
(a) makes payment of the prescribed fee; and
(b) produces to the Registrar, a certificate from a bank that the
prescribed sum to defray the expenses of the off-shore
company for the purposes of its office in Sri Lanka has
been deposited to the credit of a bank account in such
bank in the name of such off-shore company.
Such certificate of registration issued to the off-shore company
shall exempt such company from complying with any other
provisions of this Act:
Provided that no such certificate of registration shall be granted where—
(a) the winding up of such company has commenced;
(b) a receiver of the property of such company has been appointed;
(c) there is any scheme or order in relation thereto whereby the
rights of creditors are suspended or restricted.
(2) Before the Registrar issues the certificate of registration to

the off-shore company under the provisions of this section he
shall satisfy himself that—
(a) in the case of a company incorporated abroad that there is
no legal impediment in the country of incorporation to such
company engaging in the business of an off-shore company
;
(b) the issue of such certificate does not render defective

any legal or other proceedings instituted or to be insti-
tuted by or against the company,
and embody in the certificate such conditions as he may
deem necessary in the national interest.
(3) The Registrar may for good cause cancel the registra-
tion and upon such cancellation such off-shore company
shall cease to enjoy the privileges and benefits granted under
Continuation of
this Part or under any other written law.
business of off-
shore company.
243. An off-shore company shall if it intends to continue its

business as an off-shore company under the provisions of
this Act—
(a) produce to the Registrar proof of payment of the
prescribed fee in the prescribed manner at the
commencement of each calendar year and not later
than the thirty-first day of January of that year ; and
(b) produce to the Registrar not later than the thirty-first
day of January of each calendar year or before the
Prohibition of explanation of such extended time as may be
business in Sri
Lanka but saving granted by the Registrar in his discretion, a bank
benefits.
certificate as required under section 242 (1) (b) in
regard to defraying of the expenses of the off-shore
company for that year.
244. (1) An off-shore company shall not be entitled to

carry on any business in Sri Lanka, its powers being restrict-
ed to only the carrying on of any business outside the shores
of Sri Lanka.
(2) Nothing in subsection (1) shall however preclude

the off-shore company securing in Sri Lanka any benefits or
advantages available under any other written law as may be
made applicable to it.
Cessation of
business by off-
245. An off-shore company may cease carrying on
shore company.
business as an off-shore company by giving to the Registrar
notice of cessation in the prescribed form.
Interpretation of 246. In this Part "a company" means a company or body

this Part.
corporate incorporated under the laws of any country
including Sri Lanka.
PART IX
WINDING UP
(I) PRELIMINARY
Modes of Winding up
Mode of
winding up.
247. (1) The winding up of a company may be either—
(a) by the court; or
(b) voluntary; or
(c) subject to the supervision of the court.
(2) The provisions of this Act with respect to winding up
shall apply unless the contrary appears, to the winding up of a
company in any manner set out in subsection (I).
Liability as
contributories of
present and past
Contributories
members.
248. (1) In the event of a company being wound up, every

present and past member shall be liable to contribute to the
assets of the company to an amount sufficient for payment of
its debts and liabilities, and the costs, charges, and expenses of
the winding up, and for the adjustment of the rights of the
contributories among themselves, subject to the provisions of
subsection (2) and the following qualifications: —
(a) a past member shall not be liable to contribute if he has
ceased to be a member for one year or more before
the commencement of the winding up ;
(b) a past member shall not be liable to contribute in respect
of any debt or liability of the company contracted
after he ceased to be a member;
(c) a past member shall not be liable to contribute unless it
appears to the court that the existing members are
unable to satisfy the contributions required to be made
by them in pursuance of the provisions of this Act;
(d) in the case of a company limited by shares no
contribution shall be required from any member
exceeding the amount, if any, unpaid on the shares in
respect of which he is liable as a present or past
member;
(e) in the case of a company limited by guarantee, no

contribution shall, subject to the provisions of subsection (3),
be required from any member exceeding the amount
undertaken to be contributed by him to the assets of the
company in the event of its being wound up;
(f) nothing in this Act shall invalidate any provision contained
in any policy of insurance or other contract whereby the
liability of individual members on the policy or contract is
restricted, or whereby the funds of the company are alone
made liable in respect of the policy or contract;
(g) a sum due to any member of a company, in his character of
a member, by way of dividends, profits or otherwise shall not
be deemed to be a debt of the company, payable to that
member in a case of competition between himself and any
other creditor who is not a member of the company, but any
such sum may be taken into account for the purpose of the
final adjustment of the rights of the contributories among
themselves.
(2) In the winding up of a limited company, any director or

manager whether past or present, whose liability is, under the
provisions of this Act, unlimited, shall in addition to his
liability (if any) to contribute as an ordinary member, be liable
to make a further contribution as if he were at the
commencement of the winding up a member of an unlimited
company:
Provided that—
(a) a past director or manager shall not be liable to make such
further contribution where he has ceased to hold office for a
year or more prior to the date of commencement of the
winding up ;
(b) a past director or manager shall not be liable to make such
further contribution in respect of any debt or liability of the
company contracted after he ceased to hold office;
(c) subject to the articles of the company, a director or
manager shall not be liable to make such further contribution
unless the court deems it necessary to require that contribution
in order to satisfy the debts and liabilities of the company, and
the costs, charges and expenses of the winding up.
(3) In the winding up of a company limited by guarantee

which has a share capital, every member of the company shall
be liable, in addition to the amount undertaken to be
contributed by him to the assets of the company in the event of
its being wound up, to contribute to the extent of any sum
unpaid or any shares held by him.
Definition of
contributory.
249. In this Part the expression "contributory" means every
person liable to contribute to the assets of a company in the
event of its being wound up, and for the purposes of all
proceedings for determining, and all proceedings prior to the
final determination of, the persons who are to be deemed
contributories, includes any person alleged to be a contributory.
Nature of 250. The liability of a contributory shall create a debt

liability of
contributory.
accruing due from him at the time when his liability com-
menced, but payable at the times when calls are made for
enforcing the liability.
Contribu-
tories in case
251. (1) Where a contributory dies either before or after he has
of death of
member. been placed on the list of contributories, his legal
representatives shall be liable in the due course of
administration to contribute to the assets of the company in
discharge of his liability and shall be contributories accordingly.
(2) Where the legal representatives make default in paying

any money ordered to be paid by them, proceedings may be
taken for administering the estate of the deceased contributory,
and for compelling payment from such estate of the money due.
Contributories 252. Where a contributory becomes insolvent or bankrupt, either

in case of
insolvency or before or after he has been placed on the list of contributories—
bankruptcy of
member.
(a) his assignee in insolvency or his trustee in bankruptcy shall
represent him for all the purposes of the winding up, and shall be
a contributory accordingly, and may be called on to admit to
proof against the estate of the insolvent or bankrupt, or otherwise
to allow to be paid out of his assets in the due course of law, any
money due from the insolvent or bankrupt in respect of his
liability to contribute to the assets of the company; and
(b) there may be proved against the estate of the insolvent as

bankrupt the estimated value of his liability to future calls as well
as calls already made.
Provision as to company may be wound up by court.

married women.
253. (1) The husband of a female contributory married before the
date of the commencement of the Married Women's Property
Ordinance, to whom the provisions of the Matrimonial Rights
and Inheritance Ordinance applies, shall, during the continuance
of the marriage, be liable as respects any liability attaching to
any shares acquired by her before that date, to contribute to the
assets of the company the same sum as she would have been able
to contribute if she had not married, and he shall be a
contributory accordingly.
Jurisdiction to (2) Subject to the provisions of subsection (1), nothing in this

wind. up
companies Act shall affect the provisions of the Married Women's Property
registered in Sri
Lanka. Ordinance.
(II) WINDING UP BY THE COURT

Jurisdiction
254. (1) The District Court of the district in which the registered
office of a company is situated shall have jurisdiction to wind up
that company.
Circumstances
in which
(2) For the purposes of this section, the expression "registered

office" means the place which has longest been the registered
office of the company during the six months immediately
preceding the date of presentation of the petition for winding up.
Cases in which Company may be wound up by Court
255. A company may be wound up by the court if—

(a) the company has by special resolution resolved that the
company be wound up by the court;
(b) default is made in delivering the statutory report to the
Registrar or in holding the statutory meeting;
(c) the company does not commence its business within a year
from its incorporation, or suspends its business for one
year;
(d) the number of members is reduced to, in the case of a
private company, below two or, in the case of a public
company, below seven;
Definition of
inability to
pay debts.
(e) the company is unable to pay its debts;
(f) the court is of opinion that it is just and equitable that the
company should be wound up.
256. A company shall be deemed to be unable to pay its debts

where—
(a) a creditor, by assignment or otherwise, to whom the company is
indebted in a sum exceeding five hundred rupees then due, has served on the
company, by leaving it at the registered office of the company, a demand
under his hand requiring the company to pay the sum so due, and the company
has for three weeks from the date of so leaving, neglected to pay the sum, or
to secure or compound for it to the reasonable satisfaction of the creditor; or
(b) execution or other process issued on a judgment, decree
or order of any court in favour of a creditor of the
company is returned unsatisfied in whole or in part; or
(c) it is proved to the satisfaction of the court that the
company is unable to pay its debts, and, in determining
whether a company is unable to pay its debts, the court
shall take into account the contingent and prospective
liabilities of the company.
Provisions as to
applications for
winding up.
Petition for Winding up and Effects thereof

257. (1) An application to the court for the winding up of a
company shall be by petition, presented subject to the provisions
of this section either by the company, or by any creditor or
creditors (including any contingent or prospective creditor or
creditors), contributory or contributories, or by all or any of
those parties, jointly or separately :
Provided that—
(a) a contributory shall not be entitled to present a winding-up
petition unless—
(i) the number of members is reduced to, in the case of a
private company, below two, or, in the case of
any other company, below seven; or
(ii) the shares in respect of which he is a contributory or

some of them, either were originally allotted to him, or have been
held by him, and registered in his name, for at least six months
during the eighteen months immediately preceding the date of
commencement of the winding up, or have devolved on him
through the death of a former holder; and
(b) a winding-up petition shall not, where the ground of the
petition is default in delivering the statutory report to the
Registrar or in holding the statutory meeting, be presented by any
person except a shareholder, and before the expiration of
fourteen days from the last day on which the meeting ought to
have been held ; and
(c) the court shall not give a hearing to a winding-up petition
presented by a contingent or prospective creditor until such
security for costs has been given as the court thinks reasonable
and until a prima facie case for winding up has been established
to the satisfaction of the court; and
(d) the Registrar may present a winding-up petition in the
case of a company referred to in subsection (3) of section 166.
(2) Where a company is being wound up voluntarily or

subject to supervision, a winding-up petition may be presented
by the official receiver attached to the court as well as by any
other person authorized in that behalf under the provisions of this
section, but the court shall not make a winding-up order on the
petition unless it is satisfied that the voluntary winding up or
winding up subject to supervision cannot be continued with due
regard to the interests of the creditors or contributories.
(3) Where under the provisions of this Part any person as

being the husband of a female contributory is himself a
contributory, and a share has during the whole or any part of the
six months referred to in sub-paragraph (ii) of paragraph (a) of
the proviso to subsection (1), been held by or registered in the
name of the wife, or by or in the name of a trustee for the wife or
for the husband, such share shall, for the purposes of this section,
be deemed to have been held by and registered in the name of the
husband.
Powers of
court on
258. (1) On hearing a winding-up petition the court may dismiss
hearing
petition. it, or adjourn the hearing conditionally or unconditionally, or
make any interim order, or any other order that it thinks fit, but
the court shall not refuse to make a winding up order on the
ground only that the assets of the company have been mortgaged
to an amount equal to or in excess of those assets, or that the
company has no assets.
(2) Where a winding-up petition is presented by members of

the company as contributories on the ground that it is just and
equitable that the company should be wound up, the court shall,
where it is of opinion that—
(a) the petitioners are entitled to relief either by winding up
the company or by some other means; and
(b) in the absence of any other remedy it would be just and
equitable that the company should be wound up,
make a winding-up order, unless it is of the opinion that some
other remedy is available to the petitioners and that they are
acting unreasonably in seeking to have the company wound up
instead of pursuing that other remedy.
(3) Where a winding-up petition is presented on the ground of

default in delivering the statutory report to the Registrar or in
holding the statutory meeting, the court may—
(a) instead of making a winding-up order, direct that the
statutory report shall be delivered or that a meeting shall
be held; and
(b) order the costs to be paid by any persons who, in the
opinion of the court, are responsible for the default.
Power to 259. At any time after the presentation of a winding-up petition,

stay or
restrain
proceedings and before a winding-up order has been made, the company, or
against
company. any creditor or contributory, may—
(a) where any action or proceeding against the company is
pending in any court in Sri Lanka, make an application to the
court in which such action or proceeding is pending for a stay of
proceedings therein; and
(b) where any other action or proceeding is pending against the company,
make an application to the court having jurisdiction to wind up the
company to restrain further proceedings in such action or
proceeding,
and the court to which application is so made may, as the case may be, stay
or restrain the proceedings accordingly on such terms as it thinks fit.
Avoidance of
dispositions of
260. In a winding up by the court, any disposition of the property of the
property, &c.,
after commence- company, including things in action, and any transfer of shares, or
ment of winding
up alteration in the status of the members of the company, made after the
commencement of the winding up, shall, unless the court otherwise
orders, be void.
Avoidance of
attachments, &c, 261.Where any company is being wound up by the court, any
attachment, sequestration, distress, or execution put in force against the
estate or effects of the company after the commencement of the winding
up shall be void to all intents.
Commencement of Winding up
Commencement
262. (1) Where, before the presentation of a petition for the
of winding up
by the court. winding up of a company by the court, a resolution has been passed
by the company for voluntary winding up, the winding up of the
company shall be deemed to have commenced at the time of the
passing of the resolution, and unless the court, on proof of fraud or
mistake, thinks fit otherwise to direct, all proceedings taken in the
voluntary winding up shall be deemed to have been validly taken.
(2) In any other case, the winding up of a company by the court

shall be deemed to commence at the time of the presentation of the
petition for the winding up.
Consequences of Winding-up Order
Copy of order 263. On the making of a winding-up order, a copy of the order
to be forwarded
to Registrar. shall forthwith be forwarded by the company, or otherwise as may
be prescribed, to the Registrar who shall make a minute thereof in
his books relating to the company.
Actions 264. When a winding-up order has been made, or a provisional

stayed on
winding up. liquidator has been appointed, no action or proceeding shall be
proceeded with or commenced against the company except by leave
of the court, and subject to such terms as the court may impose.
Effect of 265. An order for winding up a company shall operate in favour

winding-up
order. of all the creditors and of all the contributories of the company as if
made on the joint petition of a creditor and of a contributory.
Official receiver.
Appointment of official receiver by court in
certain cases.
Official receiver in winding up
266. For the purposes of this Act, the expression "official
receiver" so far as it relates to the winding up of a company by the
court, means the official receiver, if any, attached to the court for
insolvency purposes, or, if there is no such official receiver so
attached, then such person as the Minister may appoint as official
receiver to that court.
267. If in the case of the winding up of any company by court it

appears to the court desirable, with a view to securing a more
convenient and economical conduct of such winding up, that some
officer, other than the person who would by virtue of the provisions
of section 266 be the official receiver, should be the official receiver
for the purposes of that winding up, the court may appoint that other
officer to act as official receiver in that winding up, and the person
so appointed shall be deemed to be the official receiver in that
winding up for all purposes of this Act.
Statement of 268. (1) Where the court has made a winding-up order or appointed a
company's affairs
to be submitted to provisional liquidator, there shall, unless the court thinks fit to order
official receiver.
otherwise and so orders, be made out and submitted to the official receiver a
statement in the prescribed form, of the affairs of the company, verified by
affidavit, and showing the particulars of its assets, debts, and liabilities, the
names, residences, and occupations of its creditors, the securities held by
them respectively, the dates when the securities were respectively given, and
such further or other information as may be prescribed or as the official
receiver may require.
(2) The statement referred to in subsection (1) shall be submitted and

verified by one or more of the persons who are at the relevant date the
directors and by the person who is at that date the secretary of the
company or by such of the persons hereafter in this subsection
mentioned as the official receiver, subject to the direction of the court,
may require to submit and verify the statement, that is to say, persons—
(a) who are or have been officers of the company ;
(b) who have taken part in the formation of the company at any time
within one year before the relevant date;
(c) who are in the employment of the company, or have been in the
employment of the company within the said year and are in the
opinion of the official receiver, capable of giving the
information required ;
(d) who are or have been within the said year officers of or in the
employment of a company, which is, or within the said year
was, an officer of the company to which the statement relates.
(3) The statement refered to in subsection (1) shall be submitted within
fourteen days from the relevant date, or within such extended time as
the official receiver or the court may for special reasons appoint.
(4) Any person making or concurring in making the statement and

affidavit required by the provisions of this section shall be allowed, and
shall be paid by the official receiver or provisional liquidator, as the
case may be, out of assets of the company, such costs and expenses
incurred in and about the preparation and making of the statement and
affidavit as the official receiver may consider reasonable, subject to an
appeal to the court.
(5) Where any person, without reasonable excuse, makes default in

complying with the requirements of this section, he shall be guilty of an
offence and shall be liable to a fine not exceeding two hundred and fifty
(6) Any person claiming, in writing, to be a creditor or contributory of

the company shall be entitled by himself or by his agent at all
reasonable times, on payment of the prescribed fee, to inspect the
statement submitted in pursuance of the provisions of this section and to
a copy of, or extract from, such statement.
(7) Any person claiming to be a creditor or contributory

knowing it to be false shall be guilty of a contempt of court and
shall, on the application of the liquidator or of the official
receiver, be punishable for such contempt.
(8) In this section the expression "the relevant date" means in a
case where a provisional liquidator is appointed, the date of his
Report by
Official appointment, and in a case where no such appointment is made,
Receiver.
the date of the winding up order.
269. (1) In any case where a winding-up order is made, the

official receiver shall, as soon as practicable after receipt of the
statement to be submitted under the provisions of section 268 or,
in any case where the court orders that no such statement shall be
submitted, as soon as practicable after the date of the order,
submit a preliminary report to the court—
(a) as to the amount of capital issued, subscribed and paid up
and the estimated amount of assets and liabilities ; and
(b) where the company has failed, as to the causes of the
failure; and
(c) whether in his opinion further inquiry is desirable as to any
matter relating to the promotion, formation, or failure of
the company, or the conduct of the business thereof.
(2) The official receiver may also, if he thinks fit, make a further
report, or further reports stating the manner in which the
company was formed and whether in his opinion any fraud has
been committed by any person in its promotion or formation, or
by any officer of the company in relation to the company since
the formation of such company, and any other matters which in
his opinion it is desirable to bring to the notice of the court.
(3) Where the official receiver states in any such further report as
is referred to in subsection (2) that in his opinion a fraud has
been committed, the court shall have the powers set out in
section 300.
Liquidators
Power of court
to appoint
270. For the purpose of conducting the proceedings in winding
liquidators.
up a company and performing such duties in reference thereto as
the court may impose the court may appoint a liquidator or
liquidators.
192 Companies Act, No. 17 of I982
Appointment 271. (1) The court may appoint a liquidator provisionally at any time after
and powers of
provisional
liquidator.
the presentation of a winding-up petition and before the making of a winding-up
order, and either the official receiver or any other fit person may be so
appointed.
(2) Where a liquidator is provisionally appointed by the court, the court may
limit and restrict his powers by the order appointing him.
Appointment
style, &c., of
272. The following provisions with respect to liquidators shall have effect
liquidators
on a winding-up order being made—
(a) the official receiver shall by virtue of his office become the provisional
liquidator and shall continue to act as such until he or another person
becomes liquidator and is capable of acting as such ;
(b) the official receiver shall summon separate meetings of the creditors and
contributories of the company for the purpose of determining whether or
not an application is to be made to the court for appointing a liquidator
in the place of the official receiver;
(c) the court may make any appointment and order required to give effect to
any such determination, and, if there is a difference between the determi-
nations of the meetings of the creditors and contributories in respect of
the matter aforesaid, the court shall decide the difference and make such
order thereon as the court may think fit;
(d) in a case where a liquidator is not appointed by the court the official
receiver shall be the liquidator of the company;
(e) the official receiver shall by virtue of his office be the liquidator during
any vacancy in the office of liquidator;
(f) a liquidator shall be described, where a person other than the official
receiver is liquidator, by the style of "the liquidator", and where the
official receiver is liquidator, by the style of "the official receiver and
liquidator" of the particular company in respect of which he is appointed
and not by his individual name.
Provisions
where person
273. Where in the winding up of a company by the court a
other than
official person other than the official receiver is appointed liquidator,
receiver is
appointed that person—
liquidator.
(a) shall not be capable of acting as liquidator until he has
notified such appointment, and given security in the
prescribed manner, to the Registrar;
(b) shall give the official receiver such information and such
access to, and facilities for, inspecting the books and
documents of the company, and generally such aid as
may be requisite for enabling that officer to perform his
duties under this Act.
General
provisions as
274. (1) A liquidator appointed by the court may resign or, on
to liquidators.
cause shown, be removed by the court.
(2) Where a person other than the official receiver is appointed

liquidator, he shall receive such salary or remuneration by way of
percentage or otherwise as the court may direct, and, where more
such persons than one are appointed liquidators, their
remuneration shall be distributed among them in such
proportions as the court directs.
(3) A vacancy in the office of a liquidator appointed by the court shall be

filled by the court.
(4) Where more than one liquidator is appointed by the court, the
court shall declare whether any act required or authorized to be
done under the provisions of this Act by the liquidator, is to be
done by all or any one or more of the persons so appointed.
Custody of
company's (5) Subject to the provisions of section 361, no act of a liquidator
property.
shall be or shall be deemed to be invalid by reason only of any
defect in the appointment or qualification of such liquidator.
275. Where a winding-up order has been made or where a
provisional liquidator has been appointed, the liquidator or the
provisional liquidator, as the case may be, shall take into his
custody, or under his control, all the property and things in action
to which the company is or appears to be entitled.
Vesting of 276. Where a company is being wound up by the court, the

property of
company in court may on the application of the liquidator, by order direct
liquidator.
that all or any part of the property of whatever description
belonging to the company or held by trustees on its behalf shall
vest in the liquidator by his official name, and thereupon the
property to which the order relates shall vest accordingly, and the
liquidator may, after giving such indemnity, if any, as the court
may direct, bring or defend in his official name any action or
Powers of
other legal proceedings which relates to that property or which it
liquidator.
is necessary to bring or defend for the purpose of effectually
winding up the company and recovering its property.
277. (1) The liquidator in a winding up by the court shall have

power with the sanction, either of the court or of the committee
of inspection—
(a) to bring or defend any action or other legal proceeding in
the name and on behalf of the company;
(b) to carry on the business of the company, so far as may be
necessary for the beneficial winding up of such
company;
(c) to appoint an attorney-at-law to assist him in the
performance of his duties:
Provided that where the liquidator is an attorney-at-law he
shall not appoint his partner unless the latter agrees to act
without remuneration ;
(d) to pay any classes of creditors in full;
(e) to make any compromise or arrangement with creditors or
persons claiming to be creditors, or having or alleging
themselves to have any claim, present or future, certain
or contingent, ascertained or sounding only in damages
against the company, or whereby the company may be
rendered liable ;
(f) to compromise all calls and liabilities to calls, debts, and
liabilities capable of resulting in debts and all claims,
present or future, certain or contingent, ascertained or
sounding only in damages, subsisting or alleged to
subsist between the company and a contributory or
alleged contributory, or other debtor or person
apprehending liability to the company, and all questions
in any way relating to
or affecting the assets or the winding up of the company, on

such terms as may be agreed and take any security for the
discharge of any such call, debt, liability or claim, and give a
complete discharge in respect thereof.
(2) The liquidator in a winding up by the court shall have
power─
(a) to sell the movable and immovable property and things in
action of the company by public auction or private
contract, with power to transfer the whole thereof to any
person or company, or to sell the same in parcels;
(b) to do all acts and to execute, in the name and on behalf of
the company, all deeds, receipts, and other documents,
and for that purpose to use, when necessary, the
company's seal;
(c) to prove, rank and claim in the bankruptcy, insolvency, or
sequestration of any contributory, for any balance against his
estate, and to receive dividends in the bankruptcy, insolvency or
sequestration in respect of that balance, as a separate debt due
from the bankrupt or insolvent, and rateably with the other
separate creditors;
(d) to draw, accept, make, and indorse any bill of exchange or
promissory note in the name and on behalf of the
company, with the same effect with respect to the liability
of the company as if the bill or note had been drawn,
accepted, made, or indorsed by or on behalf of the
company in the course of its business ;
(e) to raise on the security of the assets of the company any
money requisite;
(f) to take out in his official name letters of administration to
any deceased contributory, and to do in his official name
any other act necessary for obtaining payment of any
money due from a contributory or his estate which cannot
be conveniently done in the name of the company, and in
all such cases the money due shall, for the purpose of
enabling the liquidator to take out the letters of
administration or recover the money, be deemed to be
due to the liquidator himself:
Provided that nothing herein empowered shall be deemed to

affect the rights, duties, and privilieges of the Public Trustee
appointed under the Public Trustee Ordinance;
(g) to appoint an agent to do any business on behalf of such
liquidator;
(h) to do all such other things as may be necessary for winding
up the affiars of the company and distributing its assets.
(3) The exercise by the liquidator in a winding up by the court of
the powers conferred by the provisions of this section shall
be subject to the control of the court, and any creditor or
contributory may male an application to the court for the
exercise or proposed exercise of any of those powers.
Exercise and
control of 278. (1) Subject to the provisions of this Act, the liquidator of a
liquidator's
powers. company which is being wound up by the court shall, in the
administration of the assets of the company and in the
distribution thereof among its creditors, have regard to any
directions that may be given by resolution of the creditors or
contributories at any general meeting, or by the committee of
inspection, and any directions given by the creditors or
contributories at any general meeting shall in the case of conflict
be deemed to prevail over any directions given by the committee
of inspection.
(2) The liquidator may summon general meetings of the creditors

or contributories for the purpose of ascertaining their wishes, and
it shall be his duty to summon meetings at such times as the
creditors or contributories, by resolution, either at the meeting
appointing the liquidator or otherwise, may direct, or whenever
requested in writing to do so by one-tenth of the total number of
creditors or contributories, as the case may be.
(3) The liquidator may make an application to court in the
prescribed manner for directions in relation to any particular
matter arising under the winding up.
(4) Subject to the provisions of this Act, the liquidator shall use
his own discretion in the management of the estate and its
distribution among the creditors.
(6) Where any person is aggrieved by any act or decision of

the liquidator, that person may appeal to the court against such
act or decision, and the court may confirm, reserve, or modify
the act or decision complained of and make such order as it
thinks just.
Books to be
kept by 279. Every liquidator of a company which is being wound up by
liquidator.
the court shall keep, in the prescribed manner, proper books in
which he shall cause to be made entries or minutes of
Payments to proceedings at meetings, and of such other matters as may be
liquidator into
bank. prescribed, and any creditor or contributory may, subject to the
control of the court, personally or by his agent inspect any such
books.
280. (1) Every liquidator of a company which is being wound up

by the court shall, in such manner and at such times as the court
directs, pay the money received by him to the Companies
Liquidation Account at the bank at which such account is kept:
Provided that, where the committee of inspection satisfies the

court that for the purpose of carrying on the business of the
company or of obtaining advances, or for any other reason, it is
for the advantage of the creditors or contributories that the
liquidator should have an account with any other bank, the court
shall, on the application of the committee of inspection,
authorize the liquidator to make his payments into and out of
such other bank as the committee may select, and thereupon
those payments shall be made in the prescribed manner.
(2) Where any such liquidator at any time retains for more
than ten days a sum exceeding five hundred rupees or such
other amount as the court in any particular case authorizes him
to retain, then unless he explains the retention to the satisfaction
of the court, he shall pay interest on the amount as retained in
excess at the rate of twenty per centum per annum, and shall be
liable to disallowance of all or such part of his remuneration as
the court may think just, and to be removed from his office by
the court, and shall be liable to pay any expenses occasioned by
reason of his default.
(3) A liquidator of a company which is being wound up by

the court shall not pay any sums received by him as liquidator
into his private banking account.
Audit of 281. (1) Every liquidator of a company which is being wound

liquidator's
accounts. up by the court shall, at such times as may be prescribed but not
less than twice in each year during his tenure of office, send to
the Registrar an account of his receipts and payments as
liquidator.
(2) The account shall be in the prescribed form, shall be made

in duplicate, and shall be certified by a statutory declaration in
the prescribed form.
(3) The Registrar shall cause the account to be audited and for
the purpose of the audit the liquidator shall furnish the Registrar
with such vouchers and information as the Registrar may require,
and the Registrar may at any time require the production of, and
inspect any books or accounts kept by, the liquidator.
(4) When the account has been audited, one copy thereof shall
be filed and kept by the Registrar, and the other copy shall be
delivered to the court for filing and each copy shall be open to
Control of the inspection of any person on payment of the prescribed fee.

Registrar
over
liquidator.
(5) The liquidator shall cause the account when audited or a
summary thereof to be printed, and shall send a printed copy of
the account or summary by post to every creditor and
contributory.
282. (1) The Registrar shall take cognizance of the conduct of

liquidators of companies which are being wound up by the court,
and where a liquidator does not faithfully perform his duties and
duly observes all the requirements imposed on him by any
written law or otherwise, with respect to the performance of his
duties, or when any complaint is made to the Registrar by any
creditor or contributory in regard thereto, the Registrar shall
inquire into the matter, and if necessary report to the court.
(2) The Registrar may at any time require any liquidator of a
company which is being wound up by the court to answer any
inquiry in relation to any winding up in which he is engaged, and
may, where the Registrar thinks fit so to do, make an application
to court to examine him or any other person on oath on any
matter concerning the winding up.
(3) The Registrar may also direct a local investigation to be

made of the books and vouchers of the liquidator.
Release of 283. (I) When the liquidator of a company which is being wound
liquidators.
up by the court has realized all the property of the company, or
so much thereof as can, in his opinion, be realized without
needlessly protracting the liquidator, has distributed a final
dividend, if any, to the creditors, and adjusted the rights of the
contributories among themselves, and made a final return, if any,
to the contributories, or has resigned, or has been removed from
his office, the court shall, on his application for a release from
the office of liquidator, cause a report on the accounts to be
prepared, and, on his complying with all the requirements of the
court, shall take into consideration the report, and any objection
which may be urged by any creditor or contributory, or person
interested against the release of the liquidator, and shall either
grant or withhold such release accordingly.
(2) Where the release of a liquidator is withheld, the court

may, on the application of any creditor or contributory or person
interested, make such order as it thinks just, charging the
liquidator with the consequences of any act done or default made
by him in the administration of the affairs of the company.
(3) An order of the court releasing the liquidator shall

discharge him from all liability in respect of any act done or
default made by him in the administration of the affairs of the
company, or otherwise in relation to his conduct as liquidator,
but any such order may be revoked on proof that it was obtained
by fraud or by suppression or concealment of any material fact.
(4) Where the liquidator has not previously resigned or been

removed from office, his release shall have the effect of a
removal of a liquidator from his office.
Meetings of Committee of Inspection

creditors and
contributories to
determine
whether
committee of
inspection shall
be appointed.
284. (1) When a winding up order has been made by the court, it
shall be the business of the separate meetings of creditors and
contributories summoned for the purpose of determining whether
or not an application should be made to the court for appointing a
liquidator in place of the official receiver, to determine further
whether or not an. application shall be made to the court for the
appointment of a committee of inspection to act with the
liquidator and the persons who shall be members of such
committee, if appointed.
(2) The court may make any appointment or order required to

give effect to any such determination and where there is any
difference between the determinations of the meetings of the
creditors and contributories in respect of the matters referred to
in subsection (1), the court shall decide the difference and make
such order thereon as the court may think fit.
Constitution and
proceedings of 285. (1) A. committee of inspection appointed in pursuance
committee of
inspection. of the provisions of this Act, shall consist of creditors and
contributories of the company or persons holding general powers
of attorney from creditors or contributories in such proportions as
may be agreed on by the meetings of creditors and contributories,
or, in case of any difference, as may be determined by the court.
(2) The committee shall meet at such times as they, from

time to time appoint, provided that a meeting is held at least once
in every month. The liquidator or any member of the committee
may also call a meeting of the committee as and when such
liquidator or member, as the case may be, thinks necessary.
(3) The committee may act by a majority of their members

present at a meeting but shall not act unless a majority of the
committee are present.
(4) A member of the committee may resign by notice in

writing signed by him and delivered to the liquidator.
(5) Where a member of the committee becomes insolvent or

bankrupt, or compounds or arranges with his creditors, or is
absent from five consecutive meetings of the committee without
the leave of those members who together with himself represent
the creditors or contributories, as the case may be, his office shall
become vacant.
(6) A member of the committee may be removed by an
ordinary resolution at a meeting of creditors, if he represents
creditors, or of contributories, if he represents contributories,
notice of such meeting being given seven days prior to the date,
and also stating the objects, of such meeting.
(7) On a vacancy occurring in the committee, the liquidator
shall forthwith summon a meeting of creditors or of
contributories, as the case may be, to fill the vacancy, and the
meeting may, by resolution, reappoint the same or appoint
another creditor or contributory to fill the vacancy:
Provided that where the liquidator, having regard to the state of
the winding up is of the opinion that it is unnecessary for the
vacancy to be filled he may make an application to court for an
order that the vacancy shall not be filled and the court may make
such an order, or an order that such vacancy shall not be filled
except in such circumstances as may be specified in the order.
Powers of 286. Where in the case of a winding up there is no committee

court where
there is no
committee of of inspection, the court may, on the application of the liquidator
inspection.
do any act or give any direction or permission which by this Act
is authorized or required to be done or given by the committee.
General Powers of Court in Case of Winding up by Court
Power to stay
winding up.
287. (1) The court may at any time after an order for winding
up is made, on the application either of the liquidator, or the
official receiver, or any creditor or contributory, and on proof to
the satisfaction of the court that all proceedings in relation to the
winding up ought to be stayed, make an order staying the
proceedings, either altogether or for a limited time, on such terms
and conditions as the court thinks fit.
(2) On any application made under the provisions of

subsection (1), the court may, before making an order, require
the official receiver to furnish to the court a report with respect
to any facts or matters which are in his opinion relevant to the
application.
(3) A copy of every order made under the provisions of this

section shall forthwith be forwarded by the company, or
otherwise as may be prescribed, to the Registrar, who shall
forthwith make a minute of the order in his books relating to the
company.
Settlement of list
of contributorie-s 288. (1) As soon as may be after making a winding-up order, the
and application
of assets. court shall settle a list of contributories, with power to rectify the
register of members in all cases where rectification is required in
pursuance of this Act, and shall cause the assets of the company
to be collected, and applied in discharge of its liabilities :
Provided that, where it appears to the court that it will not be
necessary to make calls on or adjust the rights of contributories,
the court may dispense with the settlement of a list of
contributories.
(2) In settling the list of contributories, the court shall

distinguish between persons who are contributories in their own
right and persons who are contributories as being representatives
of, or liable for, the debts of others.
Delivery of 289. The court may, at any time after making a winding up order,
property to
liquidator.
require any contributory for the time being on the list of
contributories, and any trustee, receiver, banker, agent or officer
of the company to pay, deliver, convey, surrender, or transfer
forthwith, or within such time as the court directs, to the
liquidator any money, property, or books and papers in his hand
to which the company is prima facie entitled.
Payment of
debts due by 290. (1) The court may, at any time after making a winding-up
contributo-ry
to company
and extent order, make an order on any contributory for the time being on
which set-off
allowed. the list of contributories to pay, in the manner directed by the
order, any money due from him or from the estate of the person
whom he represents to the company, exclusive of any money
payable by him or such estate by virtue of any call in pursuance
of this Act.
(2) The court in making such an order may—

(a) in the case of an unlimited company, allow to the
contributory by way of set-off any money due to him or
to the estate which he represents from the company on
any independent dealing or contract with the company,
but not any money due to him as a member of the
company in respect of any dividend or profit; and
(b) in the case of a limited company, make to any director or
manager whose liability is unlimited or to his estate the
like allowance.
(3) In the case of any company, whether limited or unlimited,

when all the creditors are paid in full, any money due on any
account, whatever to a contributory from the company may be
allowed to him by way of set-off against any subsequent call.
Power of court
to make calls. 291. (1) The court may, at any time after making a winding-up
order, and either before or after it has ascertained the sufficiency
of the assets of the company, make calls on all or any of the
contributories for the time being settled on the list of the
contributories to the extent of their liability, for payment of any
money which the court considers necessary to satisfy the debts
and liabilities of the company, and the costs, charges, and
expenses of winding up, and for the adjustment of the rights of
the contributories among themselves, and make an order for
payment of any calls so made.
(2) In making a call the court may take into consideration the
probability that some of the contributories may partly or wholly
fail to pay the call.
Payment into
bank of moneys 292. (1) The court may order any contributory, purchaser or
due to company.
other person from whom money is due to the company to pay the
amount due into a specified bank or any branch thereof to the
account of the liquidator instead of to the liquidator, and any
such order may be enforced in the same manner, as if it had
directed payment to the liquidator.
(2) All moneys and securities paid or delivered into a specified

bank or any branch thereof in the event of a winding up by the
court shall be subject in all respects to the orders of the court.
Order on
contributory
293. (I) An order made by the court on a contributory shall,
conclusive
evidence. subject to any right of appeal, be conclusive evidence that the
money, if any, thereby appearing to be due, or ordered to be paid,
is due.
(2) All other relevant matters stated in the order shall be taken
to be truly stated as against all persons and in all proceedings
whatsoever.
Appointment of
special
294. (1) Where the official receiver becomes the liquidator of a
manager.
company, whether provisionally or otherwise, he may, where
satisfied that the nature of the estate or business of the company,
or the interests of the creditors or
contributories generally, require the appointment of a special

manager of the estate or business of the company other than
himself, make an application to court for the appointment of a
special manager of the estate or business of the company, and the
court may on such application, appoint a special manager of the
said estate or business to act during such time as the court may
direct, with such powers including any of the powers of receiver
or manager, as may be entrusted to him by the court.
(2) The special manager appointed under the provisions of

subsection (1) shall give such security and account in such
manner as the court directs.
(3) The special manager appointed under the provisions of

subsection (1) shall receive such remuneration as may be fixed
by the court.
Power to
exclude 295. The court may fix a time or times within which creditors
creditors not
proving in shall prove their debts or claims, or to be excluded from the
time.
benefit of any distribution made before such debts are proved.
Adjustment of 296. (1) The court shall adjust the rights of the contributories
right of
contributori-es.
among themselves, and distribute any surplus among the persons
entitled thereto.
(2) Nothing in this section shall be taken as excluding or

restricting any statutory rights of a Government department or
person acting under the authority of a Government department.
Inspection of
books by 297. The court may, at any time after making a winding-up
creditors and
contributori-es. order, make such order for inspection of the books and papers of
the company by creditors and contributories as the court thinks
just, and any books and papers in the possession of the company
may be inspected by creditors or contributories accordingly.
Power to order 298. The court may, in the event of the assets being insufficient
costs of
winding up to
be paid out of
to satisfy the liabilities, make an order as to the payment out of
assets.
the assets of the costs, charges, and expenses incurred in the
winding up in such order of priority as the court thinks just.
Power to 299. (1) The court may, at any time after the appointment of a
summon
persons
suspected of
provisional liquidator or the making of a winding-up order,
having pro-
perty of summon before it any officer of the company or person known or
company.
suspected to have in his possession any property of the company
or alleged to be indebted to the company, or any person whom
the court deems capable of giving information concerning the
promotion, formulation, trade, dealings, affairs, or property of
the company.
(2) The court may examine on oath any officer or person

summoned under the provisions of subsection (1) on any matter
referred to in that subsection, either orally or on written
interrogatories, and may, where such examination is conducted
orally, reduce the answers to writing and require such officer or
person to sign it.
(3) The court may require any officer or person summoned under
the provisions of subsection (1) to produce any books and papers
in his custody or power relating to the company, but, where such
officer or person claims any lien on such books or papers
produced by him, the production shall be without prejudice to
that lien, and the court shall have jurisdiction in the winding up
to determine all questions relating to that lien.
(4) Any officer or person summoned under the provisions of

subsection (1) who refuses or fails without reasonable cause to
appear before court or to produce any books or papers required to
be produced by him, at the time and on the date specified in the
summons, shall be liable to be arrested and produced before
court for examination.
Power to 300. (1) Where an order has been made by the court for the
order public
examination of
promotors, winding up of a company, and the official receiver has made a
directors, &c.
further report under the provisions of this Act stating that in his
opinion a fraud has been committed by any person in the
promotion or formation of the company, or by any officer of the
company in relation to the company since its formation, the court
may, after consideration of such report, direct that such person or
officer shall attend before the court on a day appointed by the
court for that purpose, and be publicly examined as to the
promotion or formation or the conduct of the business of the
company or as to his conduct and dealing as officer thereof.
(2) The official receiver may make representations at the

examination referred to in subsection (1) and for that purpose
may be represented by an attorney-at-law.
(3) The liquidator, where the official receiver is not the

liquidator, and any creditor or contributory, may also take part in
the examination either personally or by attorney-at-law.
(4) The person or officer examined under the provisions of this

section shall be examined on oath or affirmation and shall
answer all such questions as the court may put or allow to be put
to him.
(5) A person or officer directed to be examined under the

provisions of this section shall at his own cost, before being so
examined, be furnished with a copy of the report of the official
receiver and may at his own cost be represented by an attorney-
at-law, who shall be at liberty to put to such person or officer
such questions as the court may deem just for the purpose of
enabling him to explain or qualify any answers given by him:
Provided that where any such person or officer makes an

application to court to be exculpated from, any charges made or
alleged against him, it shall be the duty of the official receiver to
appear at the hearing of the application and draw the attention of
the court to any matters which appear to the official receiver to
be relevant, and where the court, after hearing any evidence
given or witnesses called by the official receiver, grants the
application, the court may allow the applicant such costs as it
may, in its discretion, think fit.
(6) Proceedings of the examination shall be reduced to writing,

and shall be read over to or by, and signed by, the person or
officer examined, and may thereafter be used in evidence against
him, and shall be open to the inspection of any creditor or
contributory at all reasonable times.
(7) The court may, if it thinks fit adjourn the examination from
time to time.
Power to arrest 301. The court may, at any time either before or after making a
absconding
contributory.
winding-up order, on reasonable cause being shown for
believing that a contributory is about to leave Sri Lanka or
otherwise to abscond, or to remove or conceal any of his
property for the purpose of evading payment of calls, or of
avoiding examination with respect to the affairs of the company,
may cause the contributory to be arrested, and his books and
papers and movable personal property to be seized, and kept in
safe custody until such time as the court may specify.
Powers of 302. Any powers by this Act conferred on the court shall be in
court
cumulative.
addition to, and not in restriction of, any existing powers of
instituting proceedings against any contributory or debtor of the
company, or the estate of any contributory or debtor, for the
Delegation to recovery of any call or other sums.
liquidator of
certain powers
of court.
303. The Minister may make rules for enabling or requiring all
or any of the powers and duties conferred and imposed on the
court by this Act, in respect of—
(a) the holding and conducting of meetings to ascertain the
wishes of creditors and contributories ;
(b) the settling of lists of contributories and the rectifying of
the register of members where required, and the
collecting and applying of the assets;
(c) the paying, delivery, conveyance, surrender or transfer of
money, property, books or papers to the liquidator;
(d) the making of calls ;
(e) the fixing of a time within which debts and claims shall
be proved,
to be exercised or performed by the liquidator as an officer of the
court, and subject to the control of the court:
Provided that the liquidator shall not, without the special leave
of the court, rectify the register of members, and shall not make
any call without either the special leave of the court or the
sanction of the committee of inspection.
Dissolution of
company.
304. (1) Where the affairs of a Company have been completely
wound up, the court shall, where the liquidator makes an
application in that behalf, make an order that the company be
dissolved from the date of such order, and the company shall be
dissolved accordingly.
(2) A copy of the order made under the provisions of sub-

section (1) shall within fourteen days from the date of such order,
be forwarded by the liquidator to the Registrar who shall make in
his books a minute of the dissolution of the company.
(3) Where the liquidator makes default in complying with the

requirements of this section, he shall be guilty of an offence and
shall be liable to a fine not exceeding two hundred and fifty
Manner of
ENFORCEMENT OF APPEAL FROM ORDERS
enforcing orders
of court.
305. Any order made by a court under this Act, may be enforced in the same
manner in which a decree of such court made in any suit pending therein
may be enforced.
Enforcement of 306. Where any order made by one court is required to be

winding-up order
in another court.
enforced by any other court, a certified copy of the order shall be
produced to the court required to enforce the same, and the
production of a certified copy shall be sufficient evidence of the
order, and thereupon the such other court shall take the requisite
steps in the matter for enforcing the order in the same manner as
if it had been made by that court.
Appeals. 307. An appeal from any order or decision made or given in the
winding up of a company by the court under this Act shall lie to
the Court of Appeal in the same manner and subject to the same
conditions as an appeal from any order or decision of the court
made or given in the exercise of its ordinary civil jurisdiction.
(III) VOLUNTARY WINDING UP

Resolutions for and Commencement of Voluntary Winding up
Circumstance in
which company
308. (1) A company may be wound up voluntarily—
may be wound up
voluntarily. (a) when the period, if any, fixed for the duration of the
company by the articles expires, or the event, if
any, occurs, on the occurrence of which the
articles provide that the company is to be
dissolved, and the company at a general meeting
has passed a resolution requiring the company to
be wound up voluntarily;
(b) where the company resolves by special resolution that
the company be wound up voluntarily;
(c) where the company resolves by extraordinary resolu-
tion to the effect that it cannot, by reason of its
liabilities continue its business, and that it is
advisable to wind up.
(2) In this Act the expression "a resolution for voluntary

winding up" means a resolution passed under the provisions
of subsection (1).
Notice of 309. (1) When a company has passed a resolution for

resolution to
wind up
voluntarily. voluntary winding up, it shall, within fourteen days from the date
of the passing of the resolution, give notice of the resolution by
publication in the Gazette.

default fine.
(3) For the purposes of this section the liquidator of the

company shall be deemed to be an officer of the company.
Commence-ment
of voluntary 310. A voluntary winding up shall be deemed to commence at
winding up.
the time of the passing of the resolution for voluntary winding
up.
Consequences of voluntary winding up

Effect of
voluntary 311. In the case of a voluntary winding-up, the company shall,
winding up on
business and from the date of commencement of the winding-up, cease to
status of
company. carry on its business, except so far as may be required for the
beneficial winding up thereof :
Provided that the corporate state and corporate powers of the
company shall, notwithstanding anything to the contrary in its
articles, continue until such company is dissolved.
Avoidance of
transfers, &c., 312. Any transfer of shares, not being a transfer made to, or with
after
commencem-ent the sanction of, the liquidator, and any alteration in the status of
of voluntary
winding up.
the members of the company, made after the date of
commencement of a voluntary winding up, shall be void.
Declaration of Solvency
Statutory
declaration of
313. (1) Where it is proposed to wind up a company
solvency in case
of a proposal to voluntarily, the directors of the company or, in the case of a
wind up
voluntarily. company having more than two directors, the majority of the
directors may, at a meeting of the directors, make a statutory
declaration to the effect that they have made a full inquiry into
the affairs of the company, and that they are of the opinion that
the company will be able to pay its debts in full within such
period, not exceeding twelve months from the date of
commencement of the winding up as may be specified in the
declaration.
16—A 63752 (82/06)
(2) A declaration made under the provisions of subsection (1)

shall have no effect for the purposes of this Act, unless—
(a) It is made within the five weeks immediately preceding the
date of the passing of the resolution for winding up the
company and is delivered to the Registrar for registration
by that date; and
(b) it embodies a statement of the company's assets and
liabilities as at the latest practicable date before the
making of such declaration.
(3) A winding up in the case of which a declaration has been

made and delivered in accordance with the provisions of this
section is in this Act, referred to as "a members' voluntary
winding up", and a winding up in the case of which a declaration
has not been so made and delivered is in this Act, referred to as
"a creditors' voluntary winding up".
(4) The provisions of subsection (1) shall not apply to a winding

up commenced before the appointed date and accordingly in any
such case the provisions of the Companies Ordinance shall
apply.
Provisions Applicable to a Members' Voluntary Winding up
Provisions
relating to a 314. The provisions of sections 315 to 321 (both inclusive)
members'
winding up. shall, subject to the provisions of section 315, apply in relation
to a members' voluntary winding up.
Power of company 315. (1) The company in general meeting shall appoint one or
to appoint and fix
remuneration of
directors.
more liquidators for the purpose of winding-up the affairs and
distributing the assets of the company, and may fix the
remuneration to be paid to each such liquidator.
(2) On the appointment of a liquidator all the powers of the

directors shall cease, except so far as the company in general
meeting or the liquidator, sanctions the continuance thereof.
Power to fill
vacancy in office of 316. (1) Where a vacancy occurs by death, resignation, or
liquidator.
otherwise in the office of liquidator appointed by the company,
the company at a general meeting may, subject to any
arrangement with its creditors, fill the vacancy.
(2) For the purpose of filling a vacancy in the office of

liquidator a general meeting of the company may be convened by
any contributory or, where there are more liquidators than one,
by the continuing liquidators.
(3) The meeting referred to in subsection (2) shall be held in

the manner provided by this Act, or by the articles, or in such
manner as may, on application by any contributory or by the
continuing liquidators, be determined by the court.
Power of
liquidation to 317. (1) Where a company is proposed to be, or is in course of
accept shares,
&c. in being, wound up voluntarily, and the whole or part of its business
consideration for
sale of property
of company.
or property is proposed to be transferred or sold to another
company, whether a company within the meaning of this Act or
not (in this section called "the transferee company") the
liquidator of the first-mentioned company (in this section called "
the transferor company ") may, with the sanction of a special
resolution of that company, conferring either a general authority
on the liquidator or an authority in respect of any particular
arrangement, receive in compensation or part compensation for
the transfer or sale, shares, policies, or other like interests in the
transferee company, for distribution among the members of the
transferor company, or may enter into any other arrangement
whereby the members of the transferor company may, in lieu of
receiving cash, shares, policies, or other like interests, or in
addition thereto, participate in the profits of, or receive any other
benefit from, the transferee company.
(2) Any sale or arrangement in pursuance of the provisions of

this section shall be binding on the members of the transferor
company.
(3) Where any member of the transferor company who did not
vote in favour of the special resolution expresses his dissent
therefrom in writing addressed to the liquidator, and left at the
registered office of the company within seven days from the date
of the passing of the resolution, he may require the liquidator
either to abstain from carrying the resolution into effect, or to
purchase his interest at a price to be determined by agreement or
by court upon application made to court by the member or the
liquidator in the manner provided by this section.
(4) Where the liquidator elects to purchase the member's

interest, the purchase money shall be paid before the company is
dissolved, and be raised by the liquidator in such manner as may
be determined by special resolution.
(5) A special resolution shall not be invalid for the purposes of

this section by reason that it is passed before, or concurrently
with a resolution for voluntary winding up or for appointing
liquidators, but, where an order is made within a year of the date
of passing of the resolution for winding up the company by, or
subject to the supervision of, the court, the special resolution
shall not be valid, unless sanctioned by the court.
Duty of 318. (1) Where, in the case of winding up commenced after the
liquidators to call
creditors' meeting
in case of
appointed date, the liquidator is at any time of opinion that the
insolvency.
company will not be able to pay its debts in full within the period
stated in the declaration made under the provisions of section
313, he shall forthwith summon a meeting of the creditors and
shall lay before the meeting a statement of the assets and
liabilities of the company.
(2) Where the liquidator fails to comply with the provisions

of this section, he shall be guilty of an offence and shall be liable
to a fine not exceeding five hundred rupees.
Duty of 319. (1) Subject to the provisions of section 321 in the event of
liquidator to call
general meeting
at end of each
the winding up continuing for more than one year the liquidator
year.
shall summon a general meeting of the company at the end of the
first year from the date of commencement of the winding up, and
of each succeeding year, or at the first convenient date within
three months from the end of the year or such longer period as
the Registrar may allow, and shall lay before the meeting an
account of his acts and dealings and of the conduct of the
winding up during the preceding year.
(2) Where the liquidator fails to comply with this section, he

shall be guilty of an offence and shall be liable to a fine not
exceeding two hundred and fifty rupees.
Final meeting
and dissolution.
320. (1) Subject to the provisions of section 321, as soon as the
affairs of the company are fully wound up, the liquidator shall
make up an account of the winding up showing how the winding
up has been conducted and the property of the company has been
disposed of, and thereupon shall call a general meeting of the
company for the purpose of laying before it the account, and
giving any explanation thereof.
(2) The meeting referred to subsection (1) shall be called by
advertisement in the Gazette, specifying the date, time, place,
and object thereof, and published at least one month before such
date.
(3) Within one week after the meeting referred to in

subsection (1) the liquidator shall send to the Registrar a copy of
the account, and shall make a return to him of the holding of the
meeting and of its date, and where the copy is not sent or the
return is not made in accordance with the provisions of this
subsection, the liquidator shall be guilty of an offence and shall
be liable to a fine not exceeding three hundred and fifty rupees
for every day during which the default continues:
Provided that, where a quorum is not present at the meeting,

the liquidator shall, in lieu of the return referred to in the
preceding provisions, make a return that the meeting was duly
summoned and that no quorum was present thereat, and upon
such a return being made the provisions of this subsection as to
the making of the return shall be deemed to have been complied
with.
(4) The Registrar on receiving the account and either of the

returns referred to in subsection (3) shall forthwith register
them, and on the expiration of three months from. the date of
registration of the return the company shall be deemed to be
dissolved :
Provided that the court may, on the application of the
liquidator or of any other person who appears to the court to be
interested, make an order deferring the date at which' the
dissolution of the company is to take effect for such time as the
court thinks fit.
(5) It shall be the duty of the person on whose application an

order of the court under the provisions of this section is made,
within seven days from the date of making of the order, to
deliver to the Registrar a certified copy of such order for
registration, and where such person fails so to do, he shall be
two hundred and fifty rupees for every day during which the
default continues.
(6) Where a liquidator fails to call a general meeting of the

company as required by the provisions of this section, he shall be
five hundred rupees.
Alternative 321. In any case where the provisions of section 318 have effect,
provision as to
annual and final
meetings in case
the provisions of section 329 and 330 thereof shall apply to the
of insolvency.
winding up to the exclusion of the provisions of section 319 and
320 as if the winding up were a creditors' voluntary winding up
and not a members' voluntary winding up:
Provided that the liquidator shall not be required to summon a
meeting of creditors under the provisions of section 329 at the
end of the first year from the date of commencement of the
winding up, unless the meeting held under the provisions of
section 318 is held more than three months before the end of that
year.
Provisions Applicable to a Creditor's Voluntary Winding up
Provisions
applicable to a 322. The provisions of sections 323 to 330 (both inclusive)
creditors' winding
up. shall apply in relation to a creditor's voluntary winding up.
Meeting of 323. (1) The company shall cause a meeting of the creditors of
creditors.
the company to be summoned for the day, or the day next
following the day, on which there is to be held the meeting at
which the resolution for voluntary winding up is to be proposed,
and shall cause the notices of such meeting of creditors to be sent
by post to the creditors simultaneously with the sending of the
notices of the said meeting of the company.
(2) The company shall cause notice of the meeting of the

creditors to be advertised in the Gazette and at least in two local
newspapers circulating in the district where the registered office
or principal place of business of the company is situate.
(3) The directors of the company shall—

(a) cause a full statement of the position of the company's
affairs together with a list of the creditors of the company
and the estimated amount of their claims to be laid before
the meeting of creditors to be held as referred to in
subsection (1) ; and
(b) appoint one of their number to preside at such meeting.
(4) It shall be the duty of the director appointed to preside at

the meeting of creditors to attend the meeting and preside thereat.
(5) Where the meeting of the company at which the resolution

for voluntary winding up is to be proposed is adjourned and the
resolution is passed at an adjourned meeting, any resolution
passed at the meeting of the creditors held in pursuance of the
provisions of subsection (1) shall have effect as if it had been
passed immediately after the passing of the resolution for
winding up the company
(6) Where default is made—

(a) by the directors of the company in complying with the
subsections (1) and (2) ;
(b) by the directors of the company in complying with the
provisions of subsection (3);
(c) by any director of the company in complying with the
provisions of subsection (4),
such company, or directors or director, as the case may be, shall
be guilty of an offence and shall be liable to a fine not exceeding
one thousand rupees, and in the case of default by the company,
every officer of the company who is in default shall be guilty of
an offence and shall be liable to such fine.
Appointment of
liquidator. 324. The creditors and the company at their respective meetings
referred to in section 323 may nominate a person to be liquidator
for the purpose of winding up the affairs and distributing the
assets of the company, and where the creditors and the company
nominate different persons, the person nominated by the
creditors shall be liquidator, and where no person is nominated
by the creditors the persons, if any, nominated by the company
shall be liquidator:
Provided that, in the case of different persons being nominated,
any director, member or creditor of the company may, within
seven days from the date on which the nomination was made by
the creditors, make an application to court for an order either
directing that the person nominated as liquidator by the company
shall be liquidator instead of or jointly with the person
nominated by the creditors, or appointing some other person to
be liquidator instead of the person appointed by the creditors.
Appointment of 325. (1) The creditors at the meeting held in pursuance of the
committee of
inspection.
provisions of section 323 or at any subsequent meeting, may, if
they think fit, appoint a committee of inspection consisting of not
more than five persons, and where such a committee is appointed
the company may, either at the meeting at which the resolution
for voluntary winding up is passed or at any time subsequently at
a general meeting, appoint such number of persons not exceeding
five as they think fit, to act as members of the committee:
Provided that the creditors may, if they think fit, resolve that all
or any of the persons so appointed by the company ought not to
be members of the committee of inspection, and where the
creditors so resolve the persons specified in the resolution shall
not, unless the court otherwise directs, be qualified to act as
members of the committee, and on any application to the court
under the provisions of this section the court may, if it thinks fit,
appoint other persons to act as such members in place of the
persons specified in the resolution.
(2) Subject to the provisions of any rule made under this Act,
the provisions of section 285 other than the provisions of
subsection (1) of that section, shall apply with respect to a
committee of inspection appointed under the provisions of this
section as they apply with respect to a committee of inspection
appointed in a winding up by the court.
Fixing of
liquidators' 326. (1) The committee of inspection, or where there is no such
remuneration and
ceaser of committee, the creditors, may fix the remuneration to be paid to
directors' powers.
the liquidator or liquidators.
(2) On the appointment of a liquidator, all the powers of the

directors shall cease, except so far as the committee of
inspection, or where there is no such committee, the creditors.
sanction the continuance thereof.
Power to fill
vacancy in office
327. Where a vacancy occurs, by death, resignation or otherwise,
of liquidator.
in the office of a liquidator, other than a liquidator appointed by,
or by the direction of, the court, the creditors may fill the
vacancy.
Application of
section 317 to a 328. The provisions of section 317 shall apply in the case of a
creditors' voluntary
winding up. creditors' voluntary winding up as in the case of a members'
voluntary winding up, with the modification that the powers of
the liquidator under that section shall not be exercised except
with the sanction either of the court or of the committee of
inspection.
Duty of 329. (1) In the event of the winding up continuing for more than one
liquidator to call
meetings of year, the liquidator shall summon a general meeting of the company and a
company and of
creditors at end meeting of the creditors at the end of the first year from the commencement
of each year.
of the winding up, and each succeeding year or at the first convenient date
within three months from the end of the year or such longer period as the
Registrar may allow, and shall lay before the meetings an account of his
acts and dealings and of the conduct of the winding up during the
preceding year.
(2) Where liquidator fails to comply with the provisions of this section,
he shall be guilty of an offence and shall be liable to a fine not exceeding
two hundred and fifty rupees.
Final meeting 230. (1) As soon as the affairs of the company are fully wound up the
and dissolution.
liquidator shall make up an account of the winding up, showing how the
winding up has been conducted and the property of the company has been
disposed of, and thereupon shall call a general meeting of the company and
a meeting of the creditors for the purpose of laying the account before the
meetings, and giving any explanation thereof.
(2) Every meeting referred to in subsection (1) shall be called by

advertisement in the Gazette, specifying the date, time, place, and object
thereof, and published at least one month before such date.
(3) Within one week from the date of the meetings referred to in
subsection (1) or, where such meetings are not held on the same date, from
the date of the later meeting, the liquidator shall send to the Registrar a
copy of the account, and shall make a return to him of the holding of the
meetings and of their dates, and where the copy is not sent or the return in
not made in accordance with the provisions of this subsection the liquidator
shall be guilty of an offence and shall be liable to a fine not exceeding two
hundred and fifty rupees for every day during which the default continues :
Provided that, where a quorum is not present at either such meeting,

the liquidator shall, in lieu of the return referred to in the preceding
provisions, make a return that the meeting was duly summoned and that no
quorum was present thereat, and upon such a return being made the
provisions of this subsection as to the making of the return shall, in respect
of that meeting, be deemed to have been complied with.
(4) The Registrar on receiving the account and in respect of each

meeting referred to in subsection (1), either of the returns
referred to in subsection (3), shall forthwith register them, and on
the expiration of three months from the date of registration
thereof, the company shall be deemed to be dissolved:
Provided that the court may, on the application of the liquidator
or of any other person who appears to the court to be interested,
make an order deferring the date at which the dissolution of the
company is to take effect for such time as the court thinks fit.
(5) It shall be the duty of the person on whose application an

order of the court under the provisions of this section is made,
within seven days from the date of making of the order to deliver
to the Registrar a certified copy of the order for registration, and
where that person fails so to do, he shall be guilty of an offence
and shall be liable to a fine not exceeding two hundred and fifty
(6) Where a liquidator fails to call a general meeting of the

company or a meeting of the creditors as required by the
provisions of this section, he shall be guilty of an offence and
Provisions Applicable to Every Voluntary Winding up
Provisions
applicable to 331. The provisions of sections 332 to 339 (both inclusive)
every
voluntary shall apply to every voluntary winding up whether a members' or
winding up.
a creditors' winding up.
Distribution of 332. Subject to the provisions of this Act as to preferential

property of
company.
payments, the property of a company shall, on its winding up, be
applied in satisfaction of its liabilities pari-passu, and, subject to
such application, shall, unless the articles otherwise provide, be
distributed among the members according to their rights and
interests in the company.
Powers and 333. (1) The liquidator may—

duties of
liquidator in
voluntary (a) in the case of a members' voluntary winding up, with the
winding up.
sanction of an extraordinary resolution of the
company, and, in the case of a creditors' voluntary
winding up, with the sanction of either the court or the
committee of inspection or (if there is no such
committee) a meeting of creditors, exercise any of the
powers specified in the provisions of paragraphs (d),
(e) and (f) of subsection (1) of section 277 to a
liquidator in a winding up by the court;
(b) without sanction, exercise any power other than those
referred to in paragraph (a) by this Act given to the
liquidator in a winding up by the court;
(c) exercise the power of the court under the provisions of this
Act of settling a list of contributories, and the list of
contributories shall be prima facie evidence of the
liability of the persons named therein to be
contributories.;
(d) exercise the power of the court of making calls ;
(e) summon general meetings of the company for the purpose
of obtaining the sanction of the company by special or
extraordinary resolution or for any other purpose he
may think fit.
(2) The liquidator shall pay the debts of the company and shall
adjust the rights of the contributories among themselves.
(3) When several liquidators are appointed, any power given by

this Act may be exercised by such one or more of them as may be
determined at the time of their appointment, or, in default of such
determination, by any number not less than two.
Power of court
to appoint and
remove
liquidator in
voluntary
334. (1) Where from any cause whatever there is no liquidator
winding up.
acting, the court may appoint a liquidator.
(2) The court may, on cause shown, remove a liquidator and
appoint another liquidator.
Notice by 335. (1) A liquidator appointed under any of the provisions of

liquidator of his
appointment. this Act shall within fourteen days from the, date of his
appointment, publish in the Gazette and deliver to the Registrar
for registration, a notice of his appointment, in the prescribed
form.
(2)Where the liquidator fails to comply with the requirements
of subsection (1) he shall be guilty of an offence and shall be
liable to a fine not exceeding three hundred and fifty rupees for
every day during which the default continues.
Arrangement 336. (1) Any arrangment entered into between a company,

when binding on
creditors.
about to be, or in the course of being, wound up and its creditors
shall, subject to the right of appeal under the provisions of this
section, be binding on the company where sanctioned by an
extraordinary resolution, and on the creditors where acceded to
by three-fourths the number and value of the creditors.
(2) Any creditor of contributory may, within three weeks

from the completion of the arrangement, appeal to the court
against such arrangement, and the court may thereupon, as it
thinks just, amend, vary or confirm the arrangement.
Power to apply to
court to have 337. (1) The liquidator or any contributory or creditor may
question
determined or make an application to court to determine any question arising in
powers exercised.
the winding up of a company, or to exercise, as respects
enforcing of calls, or any other matter, all or any of the powers
which the court might exercise if the company were being wound
up by the court.
(2) The court, if satisfied that the determination of the

question or the required exercise of power will be just and
beneficial, may accede wholly or partially to the application on
such terms and conditions as it thinks fit, or may make such other
order on the application as it thinks just.
(3) A copy of an order made by virtue of the provisions of

subsection (2) staying the proceedings in the winding up shall
forthwith be forwarded by the company, or otherwise as may be
prescribed to the Registrar who shall make a minute of the order
in his books relating to the company.
Costs of
voluntary 338. All costs, charges, and expenses properly incurred in the
winding up
winding up, including the remuneration of the liquidator, shall be
payable out of the assets of the company in priority to all other
claims.
Saving for rights of 339. The winding up of a company shall not bar the right of
creditors and
contributories.
any creditor or contributory to have it wound up by the court, but
where an application for winding up is made by a contributory,
the court shall be satisfied that the rights of contributories will be
prejudiced by a voluntary winding up.
(iv) WINDING UP SUBJECT TO SUPERVISION OF
COURT
Power to order
winding up 349. When a company has passed a resolution for voluntary
subject to
supervision. winding up, the court may make an order that the voluntary
winding up shall continue but subject to such supervision of the
court, and with such liberty for creditors, contributories or others
to apply to the court, and generally on such terms and conditions,
as the court thinks just.
Effect of petition
for winding up 341. A petition for the continuance of a voluntary winding up
subject to
supervision.
subject to the supervision of the court shall, for the purpose of
giving jurisdiction to the court over actions, be deemed to be a
petition for winding up by the court.
Application of
sections 260 and 342. A winding up subject to the supervision of the court shall
261 to winding
up subject to
supervision.
for the purposes of sections 260 and 261 be deemed to be a
winding up by the court.
Power of 343. (1) Where an order is made by court for a winding up

court to appoint or
remove
liquidators. subject to supervision, the court may, by that or any subsequent
order, appoint an additional liquidator.
(2) A liquidator appointed by the court under the provisions of

subsection (1) shall have the same powers, be subject to the same
obligations, and in all respects have the same position, as if he
had been duly appointed in accordance with the provisions of
this Act with respect to the appointment of liquidators in a
voluntary winding up.
(3) The court may remove any liquidator appointed under the
provisions of subsection (1) or any liquidator in a winding up
continued under the supervision of court and fill any vacancy
occasioned by such removal, or by death or resignation.
Effect of
supervision
344. (1) Where an order is made under the provisions of section
order.
340 for a winding up subject to supervision, the liquidator may,
subject to any restrictions imposed by the court, exercise all his
powers without the sanction or intervention of the court, in the
same manner as if, the company were being wound up
voluntarily :
Provided that, the powers specified in the provisions of
paragraphs (d), (e) and (f) of subsection (1) of section 277 shall
not be exercised by the liquidator except with the sanction of the
court or, in a case where before the order
the winding up was a creditors' voluntary winding up, with the

sanction of either the court of the committee of inspection or,
where there is no such committee, a meeting of the creditors.
(2) A winding up subject to the supervision of the court shall

not constitute a winding up by the court for the purpose of the
provisions of this Act which are set out in the Eighth Schedule
hereto, but, subject as aforesaid, an order for a winding up
subject to supervision shall, for all purposes, be deemed to be an
order for winding up by the court:
Provided that, where the order for winding up subject to
supervision was made in relation to a creditors' voluntary
winding up in which a committee of inspection had been
appointed, the order shall be deemed to be an order for winding
up by the court for the purposes of the provisions of section 285
other than the provisions of subsection (1) of that section, except
in so far as the operation of that section is excluded in a
voluntary winding up by rules made under this Act.
(v) PROVISIONS APPLICABLE TO EVERY

MODE OF WINDING UP
Proof and Ranking of Claims
Debts of all 345. In every winding up (subject in the case of insolvent

descriptions
companies to the application in accordance with the provisions
to be proved.
of this Act or the law of insolvency) all debts payable on a
contingency, and all claims against the company, present or
future, certain or contingent, ascertained or sounding only in
damages, shall be admissible as evidence against the company, a
just estimate being made, so far as possible, of the value of such
debts or claims as may be subject to any contingency or sound
only in damages, or for some other reason do not bear a certain
value.
Application of 346. In the winding up of an insolvent company such rules as

insolvency rules
in winding up of
insolvent
are in force for the time being under the law of insolvency or
companies.
bankruptcy with respect to the estates of persons adjudged
insolvent or bankrupt, shall be observed with regard to the
respective rights of secured and unsecured creditors and to debts
provable and to the valuation of annuities and future and
contingent liabilities and all persons who in any such case would
be entitled to prove for, and receive dividends out of, the assets
of the company may take part by the winding up, and make such
claims against the company as they respectively are entitled to
by virtue of the provisions of this section.
Preferential
payments. 347. (1) In a winding up there shall be paid in priority to all
other debts-
(a) income tax charged or chargeable for one complete year
prior to the relevant date, such year to be selected by the
Commissioner-General of Inland Revenue in accordance
with the provisions of the Inland Revenue Act, No. 28 of
1979 ;
(b) business turnover tax charged or chargeable for one
complete year prior to the relevant date, such year to be
selected by the Commissioner-General of Inland
Revenue in accordance with the provisions of the
Finance Act, No. 11 of 1963 ;
(c) all rates, or taxes (other than income tax) due from the
company at the relevant date, and having become due
and payable within the twelve months immediately prior
to that date;
(d) all dues to the Government of Sri Lanka as recurring
payments for any services given or rendered periodically;
(e) all provident fund dues, gratuity payments, and industrial
court awards payable to any employee or workman;
(f) all wages or salary (whether or not earned wholly or in
part by way of commission) of any clerk or servant in
respect of services rendered to the company during the
four months immediately prior to the relevant date and.
all wages (whether payable for time of work or for piece
work) of any workman or labourer in respect of services
so rendered;
(g) all accrued holiday remuneration becoming payable to
any clerk, servant, workman or labourer (or in the case
of his death to any other person in his right) on the
termination of his employment before or by the effect of
the winding up order or resolutions;
(h) unless the company is being wound up voluntarily merely

for the purposes of reconstruction or of amalgamation with
another company, or unless the company has at the
commencement of the winding up, under such a contract with
insurers as is referred to in section 24 of the Workmen's
Compensation Ordinance rights capable of being transferred to
and vested in the workman, all amounts due in respect of any
compensation or liability for compensation under such
Ordinance, being amounts which have accrued before the
relevant date.
(2) Notwithstanding anything in paragraph (c) of subsection

(1), the sum to which priority is given under the provisions of
that paragraph shall not in the case of any one claimant, exceed
two thousand rupees:
Provided that, where a claimant under the provisions of such
paragraph is a labourer who has entered into a contract for the
payment of a portion of his wages in a lump sum at the end of the
period of hiring, he shall have priority in respect of the total sum,
or a part thereof, as the court may decide, to be due under the
contract, proportionate to the time of service up to the relevant
date.
(3) Where any compensation under the Workmen's

Compensation Ordinance is a fortnightly payment, the amount
due in respect thereof shall for the purposes of paragraph (e) of
subsection (1) be taken to be the amount of the lump sum for
which such payment may be commuted under that Ordinance.
(4) Where any payment has been made—

(a) to any clerk, servant, workman or labourer in the
employment of the company, on account of wages or
salary; or
(b) to any such clerk, servant, workman or labourer or, in the,
case of his death, to any other person in his right, on
account of accrued holiday remuneration,
out of money advanced by some person for that purpose, the
person by whom the money was advanced shall in a winding up
have a right of priority in respect of the money so advanced and
paid up to the amount by which the sum in respect of which the
clerk, servant, workman or labourer or other person in his right,
would have been entitled to priority in the winding up has been
diminished by reason of the payment having been made.
(5) The debts referred to in the preceding provisions of this

section shall—
(a) rank equally among themselves and be paid in full, unless
the assets are insufficient to meet them, in which case
they shall abate in equal proportions;
and
(b) so far as the assets of the company available for payment
of general creditors are insufficient to meet them, have
priority over the claims of holders of debentures under
any floating charge created by the company, and be paid
accordingly out of any property comprised in, or subject
to, that charge.
(6) Subject to the retention of such sums as may be necessary

for the costs and expenses of the winding up, the debts referred
to in subsection (1) shall be discharged forthwith so far as the
assets are sufficient to meet them.
(7) In the event of a landlord or any other person distraining or

having distrained on any goods or effects of the company within
three months immediately prior to the date of a winding-up
order, the debts to which priority is given by the provisions of
this section shall be a first charge on the goods or effects so
distrained on or the proceeds of the sale thereof:
Provided that in respect of any money paid under any such
charge, the landlord or other person shall have the same rights of
priority as the person to whom the payment is made.

(a) any remuneration in respect of a period of holiday or of
absence from work through sickness or other reasonable cause
shall be deemed to be wages in respect of services rendered to
the company during that period;
(b) the expression "accrued holiday remuneration", includes, in
relation to any person, all sums which, by virtue either of his
contract of employment or of any enactment (including any order
made or direction given under any written law), are payable on
account of the remuneration which would, in the ordinary course,
have become payable to him in respect of a period of holiday,
had his employment with the company continued until he
became entitled to be allowed the holiday;
(c) the expression. " the relevant date " means—

(i) in the case of a company ordered to be wound up
compulsorily, the date of the appointment (or of first
appointment) of a provisional liquidator, or, where no
such appointment was made, the date of the winding-up
order unless in either case the company had com-
menced to be wound up voluntarily before that date;
and
(ii) in any case where the provisions of sub-paragraph (i) do
not apply, the date of the passing of the resolution for
the winding up of the company ; and
(d) the expression "rates" or "taxes" means any rate, charge, tax,
or assessment imposed or made by the Government or by any
Development Council, Municipal Council, Urban Council,
Town Council, Village Council, or other Authority
established under the provisions of any written law for the
time being in force in that behalf.
(9) The provisions of subsection (1) shall not apply in the
case of a winding up where the relevant date as defined in
subsection (7) of section 253 of the Companies Ordinance
occurred before the appointed date and in such a case the
provisions relating to preferential payments which would have
applied if this Act had not been brought into operation shall be
deemed to remain in force.
Effect of winding up on Antecedent and other Transactions
Fraudulent 348. Any conveyance, mortgage, delivery of goods, payment,

reference.
execution, or other act relating to property which would, if made
or done by or against an individual, be deemed in his insolvency
a fraudulent preference, shall if made or done by or against a
company, be deemed, in the event of its being wound up, a
fraudulent preference of its creditors, and be invalid accordingly.
(2) For the purposes of this section, the commencement of the
winding up shall be deemed to correspond with the act of
insolvency in the case of an individual.
(3) Any conveyance or assignment by a company of all its
property to trustees for the benefit of all its creditors shall be
void to all intents.
Liabilities rights 349. (1) Where, in the case of a company wound up in Sri Lanka,
of
certain
fraudulently
anything made or done after the appointed date is void under the
preferred
persons. provisions of section 348 as a fraudulent preference of a person
interested in property mortgaged or charged to secure the
company's debt, then (without prejudice to any rights or
liabilities arising apart from the provisions of this section) the
person preferred shall be subject to the same liabilities, and shall
have the same rights, as if he had undertaken to be personally
liable as surety for the debt to the extent of the charge on the pro-
perty or the value of his interest, whichever is the less.
(2) The value of the interest of the person preferred shall be

determined as at the date of the transaction constituting the
fraudulent preference, and shall be determined as if the interest is
free of all encumbrances other than those to which the charge for
the debt of the company was then subject.
(3) On any application made to the court with respect to any

payment on the ground that the payment was a fraudulent
preference of a surety or guarantor, the court shall have
jurisdiction to determine any questions with respect to the
payment arising between the person to whom the payment was
made and the surety or guarantor and to grant relief in respect
thereof, notwithstanding that it is not necessary so to do for the
purposes of the winding up, and for that purpose may give leave
to bring in the surety or guarantor as a third party as in the case
of an action for the recovery of the sum paid.
The provisions of this subsection shall apply, with the necessary
modifications, in relation to transactions other than the payment
of money as they apply in relation to payments.
Effect of
floating charge. 350. Where a company is being wound up, a floating charge
on the undertaking or property of the company created within
twelve months of the date of commencement of the winding up,
shall, unless it is proved that the company immediately after the
creation of the charge was solvent, be invalid, except to the
amount of any cash paid to the company at the time of, or
subsequently to the creation of, and in consideration for, the
charge, together with interest per annum on that amount at the
legal rate:
Provided that, in relation to a charge created more than six

months before the appointed date, the provisions of this section
shall have effect with the substitution, for the words "twelve
months", of the words "six months".
Disclaimer of
onerous
property. 351. (1) Where any part of the property of a company which
is being wound up consists of land of any tenure burdened with
onerous convenants, of shares or stock in companies,
unprofitable contracts, or of any other property that is,
unsaleable, or not readily saleable, by reason of its binding the
possessor thereof, to the performance of any onerous act, or to
the payment of any sum of money, the liquidator of the company,
notwithstanding that he has endeavoured to sell or has taken
possession of the property, or exercised any act of ownership in
relation thereto, may, with the leave of the court and subject to
the provisions of this section, by writing signed by him at any
time within twelve months from the date of commencement of
the winding up or such extended period as may be allowed, by
the court disclaim the property :
Provided that, where any such property has not come to the
knowledge of the liquidator within one month from the date of
commencement of the winding-up, the power of disclaiming the
property under the provisions of this section may be exercised at
any time within twelve months from the date he has become
aware thereof or such extended period as may be allowed by the
court.
(2) The disclaimer shall operate to determine, as from the

date of the disclaimer, the rights, interest, and liabilities of the
company, and the property of the company, in or in respect of the
property disclaimed, but shall not, except so far as is necessary
for the purpose of releasing the company and the property of the
company from liability, affect the rights or liabilities of any other
person.
(3) The court, before or on granting leave to disclaim, may

require such notices to be given to persons interested, and impose
such terms as a condition of granting such leave, and makes such
other order in the matter, as the court thinks just.
(4) The liquidator shall not be entitled to disclaim any

property under the provisions of this section in any case where an
application in writing has been made to him by any person
interested in the property requiring him to decide whether he will
or will not disclaim, and the liquidator has not, within a period of
twenty-eight days from the date of receipt of the application or
such further period as may be allowed by the court, given notice
to the applicant that he intends to make an application to court,
for leave to disclaim and, in the case of a contract, where the
liquidator upon receipt of an application as aforesaid, does not
within the said period or further period, disclaim the contract, the
company shall be deemed to have adopted it.
(5) The court may, on the application of any person, who is,
as against the liquidator, entitled to the benefit or subject to the
burden of a contract made with the company, make an order
rescinding the contract on such terms as to payment by or to
either party of damages for the non-performance of the contract,
or otherwise as the court thinks just, and any damages payable
under such order to any such person may be proved by him as a
debt in the winding up.
(6) The court may, on an application by any person who

either claims any interest in any disclaimed property or is under
any liability not discharged by this Act, in respect of any
disclaimed property and on hearing any such person as it thinks
fit, make order for the vesting of the property in, or the delivery
of the property to, any persons entitled thereto, or to whom it
may seem just that the property should be delivered by way of
compensation for such liability as aforesaid, or a trustee for him,
and on such terms as the court thinks just, and on any such
vesting order being made, the property comprised therein shall
vest accordingly in the person therein named in that behalf
without any conveyance or assignment for the purpose:
Provided that, where the property disclaimed is of a leasehold
nature, the court shall not make a vesting order in favour of any
person claiming under the company, whether as sub-lessee or as
mortgagee, except upon the terms of making that person—
(a) subject to the same liabilities and obligations as those to
which the company was subject under the lease in respect
of the property at the date of commencement of the
winding up; or
(b) where the court thinks fit, subject only to the same
liabilities and obligations as if the lease had been
assigned to that person at that date,
and in either event (if the case so requires) as if the lease had
comprised only the property comprised in the vesting order,
and any sub-lessee or mortgagee declining to accept a vesting
order upon such terms shall be excluded from all interest in,
and security upon, the property, and, where there is no person
claiming under the company who is willing to accept an
order upon such terms, the court shall have power to vest the
estate and interest of the company in the property in any
person liable either personally or in a representative
character, and either by himself or jointly with the company
to perform the lessor's convenants in the lease, freed and
discharged from all estates, encumbrances and interests
created therein by the company.
(7) Any person injured by the operation of a disclaimer under

the provisions of this section shall be deemed to be a creditor of
the company to the amount of the injury, and may accordingly
prove the amount as a debt in the winding up.
Restriction of
rights of 352. (1) Where a creditor has issued execution against the goods
creditor as to
execution or or lands of a company or has attached any debt due to the
attachment in
case of
company. company, and the company is subsequently wound up, he shall
not be entitled to retain the benefit of the execution or
attachment against the liquidator in the winding up of the
company unless he has completed the execution or attachment
before the date of commencement of the winding up.
Provided that—
(a) where any creditor has had notice of a meeting having been
called at which a resolution for voluntary winding up is
to be proposed, the date on which the creditor so had
notice shall for the purposes of the preceding provisions
be substituted for the date of commencement of the
winding up;
(b) a person who purchases in good faith under a sale by order
of court any goods of a company on which an execution
has been levied shall in all cases acquire a good title to
them against the liquidator;
(c) the rights conferred by the provisions of this subsection on
the liquidator may be set aside by the court in favour of
the creditor to such extent and subject to such terms as
the court may think fit.
(2) For the purposes of this section, an execution against

goods shall be taken to be completed by seizure and sale, and an
attachment of a debt shall be deemed to be completed by receipt
of the debt, and an execution against land shall be deemed to be
completed by seizure and, in the case of an equitable interest, by
the appointment of a receiver.
(3) In this section the expression "goods" includes all movable
property.
Duties of
Fiscal as to 353. (1) Subject to the provisions of subsection (3) where any
goods taken in
execution. goods of a company are taken in execution, and, before the sale
thereof or the completion of the execution by the receipt or
recovery of the full amount of the levy, notice is served on the
Fiscal that a provisional liquidator has been appointed or that a
winding-up order has been
made or that a resolution for voluntary winding up has been

passed, the Fiscal shall on being so required, deliver the goods
and any money seized or received in part satisfaction of the
execution to the liquidator, but the costs of the execution shall be
a first charge on the goods or money so delivered, and the
liquidator may sell the goods, or a sufficient part thereof, for the
purpose of satisfying that charge.
(2) Subject to the provisions of subsection (3), where under an

execution in respect of a judgment for a sum exceeding two
hundred and fifty rupees the goods of a company are sold or
money is paid in order to avoid sale, the Fiscal shall deduct the
costs of the execution from the proceeds of the sale or the money
paid and retain the balance for fourteen days, and if within that
time notice is served on him of a petition for the winding up of
the company have been presented or of a meeting having been
called at which there is to be proposed a resolution for the
voluntary winding up of the company and an order is made or a
resolution is passed, as the case may be, for the winding up of
the company, the Fiscal shall pay the balance to the liquidator,
who shall be entitled to retain it as against the execution creditor.
(3) The rights conferred by the provisions of this section on the

liquidator may be set aside by the court in favour of the creditor
to such extent and subject to such terms as the court may think
fit.
(4) In this section the expression "goods" include all movable

property and the expression "Fiscal" includes any officer
charged with the execution of a writ or other process.
Offences Antecedent to or in Course of Winding up

Offences by
officers of 354. (1) Where any person, being a past or present officer of a
companies in
liquidation. company which at the time of the commission of the alleged
offence is being wound up, whether by or under the supervision
of the court or voluntarily, or is subsequently ordered to be
wound up by the court or subsequently passes a resolution for
voluntary winding up—
(a) does not to the best of his knowledge and belief fully and
truly make known to the liquidator all the property,
movable and immovable, of the company, and how and
to whom and for what consideration and when the
company disposed of any part thereof, except such part
as has been disposed of in the ordinary course of the
business of the company ;
or
(b) does not deliver to the liquidator, or as he directs, all such

part of the movable and immovable property of the
company as is in his custody or under his control, and
which he is required by law to deliver; or
(c) does not deliver to the liquidator, or as he directs, all books
and papers in his custody or under his control belonging
to the company and which he is required by law to
deliver; or
(d) within the twelve months immediately prior to the date of
commencement of the winding up or at any time
thereafter conceals any part of the property of the
company to the value of one hundred rupees or more, or
conceals any debt due to or from the company; or
(e) within the twelve months immediately prior to the date of
thereafter fraudulently removes any part of the property
of the company to the value of one hundred rupees or
more ; or
(f) makes any material omission in any statement relating to
the affairs of the company; or
(g) knowing or believing that a false debt has been proved by
any person under the winding up, fails for the period of a
month to inform the liquidator thereof; or
(h) after the date of commencement of the winding up prevents
the production of any book or paper affecting or relating
to the property or affairs of the company; or
(i) within the twelve months immediately prior to the date of
thereafter, conceals, destroys, mutilates, or falsifies, or is
privy to the concealment, destruction, mutilation or,
falsification of any book or paper affecting or relating to,
the property or affairs of the company; or
(j) within the twelve months immediately prior to the date of
thereafter makes or is privy to the making of any false
entry in any book or paper affecting or relating to the
property or affairs of the company ; or
(k) within the twelve months immediately prior to the date of

thereafter fraudulently parts with, alters, or makes any
omission in, or is privy to the fraudulent parting with,
altering, or making any omission in, any document
affecting or relating to the property or affairs of the
company; or
(l) after the date of commencement of the winding up or at any
meeting of the creditors of the company within twelve
months immediately prior to the date of commencement
of the winding up attempts to account for any part of the
property of the company by fictitious losses or expenses ;
or
(m) has within the twelve months immediately prior to the date
of commencement of the winding up or at any time
thereafter, by any false representation or other fraud,
obtained any property for or on behalf of the company on
credit which the company does not subsequently pay for;
or
(n) within the twelve months immediately prior to the date of
thereafter, under the false pretence that the company is
carrying on its business, obtains on credit, for or on
behalf of the company, any property which the company
does not subsequently pay for ; or
(o) within the twelve months immediately prior to the date of
thereafter pawns, pledges, or disposes of any property of
the company which has been obtained on credit and has
not been paid for, unless such pawning, pledging, or
disposing is in the ordinary way of the business of the
company ; or
(p) is guilty of any false representation or other fraud for the
purpose of obtaining the consent of the creditors of the
company or any of them to an agreement with reference
to the affairs of the company or to the winding up,
he shall be guilty of an offence and shall, in the case of the
offences referred to in paragraphs (m), (n) and (o), be liable to
imprisonment of either description for a term not exceeding
five years, and in the case of any other offence
under the provisions of this subsection shall be liable to
years:
Provided that it shall be a good defence, to a charge under the
provisions of, any of paragraphs (a), (b), (c), (d), (f), (n) and (o), for the
accused to prove that he had no intent to defraud, and to a charge under
the provisions of any of paragraphs (h), (i) and (j) to prove that he had no
intent to conceal the state of affairs of the company or to defeat the law.
(2) Where any person pawns, pledges or disposes of any

property in the circumstances which amount to an offence under
the provisions of paragraph (o) of subsection (1), every person
who takes in pawn or pledge or otherwise receives the property
knowing it to be pawned, pledged, or disposed of, in such
circumstances as aforesaid shall be guilty of an offence, and
shall be liable to imprisonment of either description for a term
not exceeding seven years.
(3) For the purposes of this section, the expression "officer"

instructions the directors of a company have been accustomed to
act.
Penalty for
falsification of 355. Where any officer, or contributory of any company being
books.
wound up destroys, mutilates, alters or falsifies any books,
papers or securities, or makes or is privy to the making of any
false or fraudulent entry in any register, book of account, or
document belonging to the company with intent to defraud or
deceive any person, he shall be guilty of an offence and shall be
liable to imprisonment of either description for a term not
exceeding two years.
Frauds by
officers of 356. Where any person, being at the time of the commission of
companies
which have the alleged offence an officer of a company which is
gone into
liquidation.
subsequently ordered to be wound up by the court or subse-
quently passes a resolution for voluntary winding up—
(a) has by false pretences or by means of any other fraud
induced any person to give credit to the company ;
(b) with intent to defraud creditors of the company, has made
or caused to be made any gift or transfer of or charge on,
or has caused or connived at the levying of any execution
against, the property of the company ;
(c) with intent to defraud creditors of the company, has

concealed or removed any part of the property of the
company since, or within two months before, the date or
any unsatisfied judgment or order for payment of money
obtained against the company,
he shall be guilty of an offence and shall be liable to

years.
Liability where
proper 357. (1) Where in the course of winding up of a company it is
accounts not
kept.
shown that proper books of accounts were not kept by the
company throughout the period of two years immediately
preceding the date of commencement of the winding up, or the
period between the incorporation of the company and the date of
commencement of the winding up, whichever is the shorter,
every officer of the company who is in default shall, unless he
shows that he acted honestly and that in the circumstances in
which the business of the company was carried on, the default
was inevitable, be guilty of an offence and shall be liable on
conviction to imprisonment of either description for a term not
exceeding one year.
(2) For the purposes of this section, proper books of account

shall be deemed not to have been kept in the case of any
company if there have not been kept such books or accounts as
are necessary to exhibit and explain the transactions and
financial position of the trade or business of the company,
including books containing entries from day to day in sufficient
detail of all cash received and cash paid, and, where the trade or
business has involved dealings in goods, statement of annual
stock-takings and (except in the case of goods sold by way of
ordinary retail trade) of all goods sold and purchased, showing
the goods and the buyers and sellers thereof in sufficient detail to
enable those goods and those buyers and sellers to be identified.
Responsibility for
fraudulent trading 358. (1) Where in the course of the winding up of a company it
of persons
concerned.
appears that any business of the company has been carried on
with intent to defraud creditors of the company or creditors of
any other person or for any fradulent purpose, the court may, on
the application of the official receiver, or the liquidator or any
creditor or contributory of the company, where it thinks proper
so to do, declare that any persons who were knowingly parties to
the carrying on of the business in the manner referred to in
section 350 shall be personally responsible, without any
limitation or liability, for all or any of the debts or other
liabilities of the company as the court may direct.

At the hearing of an application under the provisions of this
subsection the official receiver or the liquidator, as the case may
be, may himself give evidence or call witnesses.
(2) Where the court makes any declaration under the provisions
of subsection (1), it may give such further directions as it thinks
proper for the purpose of giving effect to the declaration, and in
particular may make provision for making the liability of any
such person under the declaration a charge on any debt or
obligation due from the company to him, or on any mortgage or
charge or any interest in any mortgage on any assets of the
company held by or vested in him, or any company or person on
his behalf, or any person claiming as assignee from or through
the person liable or any company or person acting on his behalf,
and may from time to time make such further order as may be
necessary for the purpose of enforcing any charge imposed
under the provisions of this subsection.
For the purposes of this subsection, the expression "assignee"
includes any person to whom or in whose favour, by the
directions of the person liable, the debt, obligation, mortgage or
charge was created, issued or transferred or the interest created,
but does not include an assignee for valuable consideration (not
including consideration by way of marriage) given in good faith
and without notice of any of the matters on the ground of which
the declaration is made.
(3) Where any business of a company is carried on with such

intent or for such purpose as is referred to in subsection (1),
every person who was knowingly a party to the carrying on of
the business in the manner aforesaid, shall be guilty of an
offence and shall be liable on conviction to a fine not exceeding
five thousand rupees or to imprisonment of either description for
a term not exceeding two years or to both such fine and
imprisonment.
(4) The provisions of this section shall have effect not-

withstanding that the person concerned may be criminal1y liable
in respect of the matters on the ground of which the declaration
is to be made, and the declaration shall, for the purposes of the
Insolvency Ordinance, be deemed to be a judgment for the
recovery of a debt or money demand referred to in section 12 of
that Ordinance.
Powers of court
to assess 359. (1) Where in the course of winding up of a company it
damages against
delinquent appears that any person who has taken part in the formation or
directors.
promotion of the company, or any past or present director,
manager or liquidator, or any officer of the company, has
misapplied or retained or become liable or
accountable for any money or property of the company, or has

been guilty of any misfeasance or breach of trust in relation to
the company, the court may, on the application of the official
receiver, or the liquidator, or of any creditor or contributory,
examine into the conduct of the promoter, director, manager,
liquidator, or officer, and compel him to repay or restore the
money or property or any part thereof respectively with interest
at such rate as the court thinks just, or to contribute such sum to
the assets of the company by way of compensation in respect of
the misapplication, retainer, misfeasance, or breach of trust as
the court thinks just.
(2) The provisions of this section shall have effect not-
withstanding that the offence is one for which the offender may
be criminally liable.
(3) Where an order for payment of money is made under the
provisions of this section, the order shall for the purposes of the
Insolvency Ordinance, be deemed to be a judgment for the
recovery of a debt or money demand referred to in section 12 of
that Ordinance.
Prosecution of
delinquent officers 360. (I) Where it appears to the court in the course of a winding up by,
and members of the
company.
or subject to the supervision of, the court that any past or present officer, or
any member, of the company has been guilty of any offence in relation to
the company for which he is criminally liable, the court may, either on the
application of any person interested in the winding up or of its own motion,
direct the liquidator either himself to prosecute the offender or to refer the
matter to the Attorney-General.
(2) Where it appears to the liquidator in the course of a

voluntary winding up that any past or present officer, or any
member, of the company has been guilty of any offence in
relation to the company for which he is criminally liable, he shall
forthwith report the matter to the Attorney-General and shall
furnish to him such information and give to him such access to,
and facilities for, inspecting and taking copies of any documents,
being information or documents in the possession or under the
control of the liquidator and relating to the matter in question, as
he may require.
238 Companies Act, No. 17of 1982
(3) Where any report is made under the provisions of subsection

(2) to the Attorney-General he may, if he thinks fit, refer the
matter to the Registrar for inquiry and the Registrar shall
thereupon investigate the matter and may, where he thinks it
expedient, make an application to court for an order conferring
on him or any person designated by him for the purpose with
respect to the company concerned all such powers of
investigating the affairs of the company as are provided by this
Act in the case of a winding up by the court.
(4) Where on any report to the Attorney-General under the

provisions of subsection (2) it appears to the Attorney-General
that the case is not one in which proceedings ought to be taken
by him, he shall inform the liquidator accordingly, and
thereupon, subject to the previous sanction of the court, the
liquidator may himself take proceedings against the offender.
(5) Where it appears to the court in the course of a voluntary

winding up that any past or present officer, or any member, of
the company has been guilty as aforesaid, and that no report with
respect to the matter has been made by the liquidator to the
Attorney-General under the provisions of subsection (2), the
court may, on the application of any person interested in the
winding up or of its own motion, direct the liquidator to make
such report, and on a report being made accordingly the
provisions of this section shall have effect as though the report
has been made in pursuance of the provisions of subsection (2).
(6) If, where any matter is reported or referred to the Attorney-

General under the provisions of this section, the Attorney-
General considers that the case is one in which a prosecution
ought to be instituted, he shall institute proceedings accordingly,
and it shall be the duty of the liquidator and of every officer and
agent of the company past and present (other than the accused in
the proceedings) to give him all assistance in connection with the
prosecution which he is reasonably able to give.
For the purposes of this subsection, the expression " agent " in
relation to a company shall be deemed to include any banker or
attorney-at-law of the company and any person employed by the
company as auditor whether that person is, or is not an officer of
the company.
(7) Where any person fails or neglects to give assistance in the
manner required by subsection (6) the court may, on the
application of the Attorney-General, direct that person to comply
with the requirements of the said subsection, and where any such
application is made with respect to a liquidator the court may,
unless it appears that the failure or neglect to comply was due to
the liquidator not having in his hands sufficient assets of the
company to enable him so to do, direct that the costs of the
application shall be borne by the liquidator personally.
Supplementary Provisions as to Winding up

Disqualificat-ion
for appointment 361.(1) A body corporate or any director or secretary of the
as liquidator.
company shall not be qualified for appointment as liquidator of a
company, whether in a winding up by or under the supervision
of the court or in a voluntary winding up, and any appointment
made in contravention of the provisions of this section shall be
void.
(2) Nothing in this section shall disqualify a body corporate

from acting as liquidator of company if acting under an
appointment made before the appointed date, but subject as
aforesaid, any body corporate which acts as liquidator of a
company shall be guilty of an offence and shall be liable to a
fine not exceeding one thousand rupees.
Corrupt
inducement 362. Any person who gives or agrees or offers to give to any
affecting
appointment as member or creditor of a company any valuable consideration
liquidator.
with a view to securing his own appointment or nomination, or
to securing or preventing the appointment or nomination of some
person other than himself, as the company's liquidator shall be
guilty of an offence and shall be liable on conviction to a fine
not exceeding two thousand rupees.
Enforcement of
duty of liquidator 363. (1) Where any liquidator, who has made any default in
to make returns,
&c. filing, delivering or making any account, document or return, as
the case may be, or in giving any notice which he is by law
required to file, deliver, make or give, fails to make good the
default within fourteen days from the date of service on him of a
notice requiring him to do so, the court may, on an application
made to the court by any contributory or creditor of the company
or by the Registrar, make an order directing the liquidator to
make good the default within such time as may be specified in
the order.
(2) Any order made under the provisions of subsection (1)

may provide that all costs of and incidental to the application
shall be borne by the liquidator.
(3) Nothing in this section shall be taken to prejudice the

operation of any written law imposing penalties on a liquidator
in respect of any such default as is referred to in subsection (1).
Notification that
a company is in
liquidation.
364. (1) Where a company is being wound up, whether by or
under the supervision of the court or voluntarily, every invoice,
order for goods or business letter issued by or on behalf of the
company or a liquidator of the company or a receiver or manager
of the property of the company, being a document on or in which
the name of the company appears, shall contain a statement that
the company is being wound up.

this section, the company and any of the following persons who
Exemption of
certain knowingly and wilfully authorizes or permits the default,
documents from
stamp duty on
winding up of
namely, any officer of the company, any liquidator of the
companies.
company and any receiver or manager, shall be guilty of an
offence and shall be liable to a fine of two hundred and fifty
rupees.
365. In the case of a winding up by the court or of a creditors'

voluntary winding up of a company—
(a) every deed relating solely to movable or immovable
property or creating any mortgage, charge or other
encumbrance on, or any estate, right or interest in, any
such property which forms part of the assets of the
company and which, after the execution of the deed, is
or remains part of the assets of the company; and
(b) every power of attorney, proxy paper, writ, order,
certificate, affidavit, bond or other instrument or writing
relating solely to the property of any company which is
being so wound up or to any proceeding under any such
winding up,
shall be exempt from stamp duty.
Books of
company to be 366. Where a company is being wound up, all books and
evidence.
papers of the company and of the liquidators shall, as between
the contributories of the company, be prima facie evidence of
the truth of all matters purporting to be therein recorded.
Disposal of 367. (1) Where a company has been wound up and is about to
books and
papers of be dissolved, the books and papers of the company and of the
company.
liquidators may be disposed of as follows, that is to say:—
(a) in the case of a winding up by, or subject to the
supervision of, the court in such way as the court directs;
(b) in the case of a members voluntary winding up, in such
way as the company by extraordinary resolution directs, and, in
the case of a creditors' voluntary winding up, in such way as the
committee of inspection or, where there is no such committee, as
the creditors of the company, may direct.
(2) After five years from the date of dissolution of the

company no responsibility shall rest on the company, the
liquidators, or any person to whom the custody of the books and
papers has been committed, by reason of any book or paper not
being forthcoming to any person claiming to be interested
therein.
(3) Rules may be made for enabling the Registrar to prevent,

for such period (not exceeding five years from the date of
dissolution of the company) as he thinks fit, the destruction of
the books and papers of a company which has been wound up,
and for enabling any creditor or contributory of the company to
Information make representations to the Registrar and to appeal to the court

as to
pending from any direction which may be given by the Registrar in the
liquidations.
matter.
(4) Where any person acts in contravention of any rule made

under the provisions of subsection (3) or of any direction of the
Registrar thereunder, he shall be guilty of an offence and shall be
liable to a fine not exceeding one thousand rupees.
368. (1) Where the winding up of a company is not

concluded within one year from the date of its commencement,
the liquidator shall, at such intervals as may be prescribed, until
the winding up is concluded, send to the Registrar a statement in
the prescribed form and containing the prescribed particulars
with respect to the proceedings in and position of the liquidation.
(2) Where a liquidator fails to comply with the provisions of

this section, he shall be guilty of an offence and shall be liable to
a fine not exceeding five hundred rupees for each day during
which the default continues.
18—A 63752 (82/06)
Unclaimed assets 369. (1) In the winding up of a company where it appears either
to be paid in
Companies
Liquidation
from any statement sent to the Registrar under the provisions of
Account.
section 368 or otherwise that a liquidator has in his hands or
under his control any money representing unclaimed or
undistributed assets of the company which have remained
unclaimed or undistributed for six months from the date of their
receipt or any money held by the company in trust in respect of
dividends or other sums due to any person as a member of the
company the liquidator shall forthwith pay the said money to the
Companies Liquidation Account and shall be entitled to the
prescribed certificate of receipt for the money so paid, and that
certificate shall be an effectual discharge to him in respect
thereof.
(2) For the purpose of ascertaining and getting in any money

payable into the Companies Liquidation Account in pursuance of
the provisions of this section, the Registrar may order any
liquidator or other person to submit to him an account verified by
affidavit, of any such money as is referred to in subsection (1)
and may direct and enforce an audit of that account in such
manner as may be prescribed. The Registrar may from time to
time appoint a person to collect and get in any such money and
for the purposes of this section any court having jurisdiction in
insolvency shall have and, at the instance of the person so
appointed or of the Registrar, may exercise all the powers
conferred by the Insolvency Ordinance with respect to the
discovery and realization of the property of an insolvent, and the
provisions of that Ordinance with respect thereto shall apply
accordingly to proceedings under the provisions of this section,
with such modifications as may be necessary.
(3) Any person claiming to be entitled to any money paid into the
Companies Liquidation Account in pursuance of the provisions
of this section may apply to the Registrar for payment thereof,
and the Registrar may, on a certificate by the liquidator that the
person claiming is so entitled, make an. order for the payment to
that person of the sum due.
(4) Any person dissatisfied with the decision of the Registrar in

respect of a claim made in pursuance of the provisions of this
section may appeal to court against such decision, in such
manner as may be prescribed. The decision of the court on such
appeal shall be final.
(5) Where any money paid into the Companies Liquidation

Account in pursuance of the provisions of this section remains
unclaimed thereafter for a period of fifteen years, such money
shall be credited to the Consolidated Fund:
Provided, however, that where any person makes a claim in the

prescribed manner to the total sum or any part of such money
and establishes such claim to the satisfaction of the Deputy
Secretary to the Treasury, the Minister in charge of the subject of
Finance may authorize the payment to that person out of the
Resolutions
passed at
Consolidated Fund, of the sum to which he so establishes claim.
adjourned
meetings of
creditors and
contributories. 370. Where after the appointed date a resolution is passed at an
adjourned meeting of any creditors or contributories of a
company, the resolution shall for all purposes, be treated as
having been passed on the date on which it was in fact passed,
Meetings to
ascertain wishes and shall not be deemed to have been passed on any earlier date.
of creditors or
contributories.
Supplementary Powers of Court

371. (1) The court may, as to all matters relating to the
winding up of a company, have regard to the wishes of the
creditors or contributories of the company, as proved to it by any
sufficient evidence, and may, if it thinks fit, for the purpose of
ascertaining those wishes, direct meetings of the creditors or
contributories to be called, held, and conducted an such manner
as the court directs, and may appoint a person to act as chairman
of any such meeting and to report the result thereof to the court.
(2) In the case of creditors, regard shall be had to the value of

each creditor's debt.
(3) In the case of contributories, regard shall be had to the

number of votes conferred on each contributory by this Act or
the articles.
Provisions as to Dissolution
Power of court
to declare 372. (1) Where a company has been dissolved, the court may at
dissolution of
company void. any time within two years from the date of the dissolution, on an
application being made for the purpose by the liquidator of the
company or by any other person who appears to the court to be
interested, make an order, upon such terms as the court thinks fit,
declaring the dissolution to have been void, and thereupon such
proceedings may be taken as might have been taken if the company
had not been dissolved.
(2) It shall be the duty of the person on whose application the

order under the provisions of subsection (1) was made, within
seven days from the date of the order, or such further time as the
court may allow, to deliver to the Registrar for registration, a
certified copy of such order, and where such person fails so to
do, he shall be guilty of an offence and shall be liable to a fine
not exceeding two hundred and fifty rupees for every day during
which the default continues.
Registrar 373. (1) Where the Registrar has reasonable cause to believe that
may
strike off a company is not carrying on business or in operation, he may
defunct
company
from
send to the company by post a letter inquiring whether the
register.
company is carrying on business or in operation.
(2) Where the Registrar does not within one month of the date of
sending the letter referred to in subsection (1) receive any answer
thereto, he shall within fourteen days from the date of expiry of
the said period of one month, send to the company a letter by
registered post referring to the first letter, and stating that no
answer thereto has been received, and that if an answer is not
received to the second letter within one month from the date
thereof, a notice will be published in the Gazette with a view to
striking off name of the company from the register.
(3) Where the Registrar, under the provisions of subsection (2),

either receives an answer to the effect that the company is not
carrying on business or in operation, or does not within one
month after sending the second letter receive any answer, he may
publish in the Gazette, and send to the company by post, a notice
that at the expiration of three months from the date of that notice
the name of the company specified therein will, unless cause is
shown to the contrary, be struck off the register and be dissolved.
(4) Where, in the winding up of a company the Registrar has
reasonable cause to believe either that no liquidator is acting, or
that the affairs of the company are fully wound up, and the
returns required to be made by the liquidator under the
provisions of this Act have not been made for a period of six
consecutive months, the Registrar shall publish in the Gazette
and send to the company or the liquidator, if any, a notice as is
referred to in subsection (3).
(5) Upon the expiration of the period specified in the notice

given under the provisions of subsection (4), the Registrar may,
unless cause to the contrary is previously shown by the company,
strike off the name of the company from the register, and shall
publish a notice thereof in the Gazette, and upon such publication
the company shall be dissolved:
Provided that—
(a) the liability, if any, of every director, manager and member
of the company shall continue and may be enforced as if
the company had not been dissolved ; and
(b) nothing in the provisions of this subsection shall affect the
power of the court to wind up a company the name of
which has been struck off the register.
(6) Where a company or any member or creditor thereof is

aggrieved by the company having been struck off the register, the
court on an application made by the company or member or
creditor, as the case may be, before the expiration of ten years
from the publication in the Gazette of the notice referred to in
subsection (5) may, if satisfied that the company was at the time
of the striking off carrying on business or in operation, or
otherwise that it is just that the name of the company be restored
to the register, order the name of the company to be restored to
the register, and upon a certified copy of the order being
delivered to the Registrar for registration, the company shall be
deemed to have continued in existence as if its name had not
been struck off the register ; and the court may by such order
give such directions and make such provisions as to it seems just
for placing the company and all other persons in the same
position as nearly as may be as if the name of the company had
not been struck off the register.
(7) A notice to be sent under the provisions of this section to a

liquidator may be addressed to the liquidator at his last known
place of business, and a letter or notice to be sent under the
provisions of this section to a company may be addressed to the
company at its registered office, or where no office has been
registered, to the care of some officer of the company, or where
there is no officer of the company whose name and address are
known to the Registrar, to each of the persons who subscribed to
the memorandum addressed to the Registrar at the address
specified in the memorandum.
Property of 374. Where a company is dissolved, all property and rights

dissolved
company to vest whatsoever vested in or held on trust for the company immediately
in the State.
before the date of its dissolution (including leasehold property but
not including property held by the company on trust for any other
person) shall, subject and without prejudice to any order which may
at any time be made by the court under the provisions of sections 372
and 373, vest in and be at the disposal of the State
General Accounts
Companies
Liquidation
375. (1) An account, to be called the Companies Liquidation Account,
Account. shall be kept by the Registrar with such bank as may from time to time be
approved by the Minister in charge of the subject of Finance.
(2) All payments out of money standing to the credit of the Registrar in
the Companies Liquidation Account shall be made in the prescribed
manner.
Investment of 376. (1) Whenever the cash balance standing to the credit of the
surplus funds on
general account. Companies Liquidation Account is in excess of the amount which in the
opinion of the Registrar is required for the time being to answer demands in
respect of companies' estates, the Registrar shall notify such excess to the
Deputy Secretary to the Treasury and shall pay over to him, to such account
as he may direct, the whole or any part of such excess which he may
require; and the Deputy Secretary to the Treasury may invest the sums paid
over, or any part thereof, in Government securities, to be placed to the credit
of such account.
(2) When any part of the money invested under the provisions of
subsection (1) is, in the opinion of the Registrar, required to answer ay
demands in respect of companies' estates, the Registrar shall notify the
requirement to the Deputy Secretary to the Treasury who shall thereupon
repay to the Registrar such sum as may be required to the credit of the
Companies Liquidation Account, and for that purpose may direct the sale of
such part of the securities referred to in subsection (1) as may be necessary.
(3) The dividends on investments made under the provisions of this

section shall be paid into the Companies Liquidation Account.
Separate
accounts 377. (1) An account shall be kept by the Registrar of the
of particular
estates. receipts and payments in the winding up of each company, and,
when the cash balance standing to the credit of the account of
any company is in excess of the amount which, in the opinion of
the committee of inspection, is required for the time being to
answer demands in respect of that company's estate, the Registrar
shall, on the request of such committee, invest the amount not so
required in Government securities, to be placed to the credit of
the such account for the benefit of the company.
(2) When any part of the money invested under the provisions of
subsection (1) is, in the opinion of the committee of inspection,
required to answer any demands in respect of the estate of the
company, the Registrar shall, on the request of the committee,
raise such sum as may be required by such sale of such part of
the securities referred to in subsection (1) as may be necessary.
(3) The dividends on investments made under the provisions of

this section shall be paid to the credit of the company.
(4) When the balance at the credit of any company's account in

the hands of the Registrar exceeds twenty thousand rupees, and
the liquidator gives notice to the Registrar that the excess is not
required for the purposes of the liquidation, the company shall be
entitled to interest on the excess at such rate as may be
prescribed and until so prescribed at the rate of two per centum
per annum.
Rules and Fees

Rules and fees
for winding up. 378. (1) Rules may be made by the Minister to provide for the
carrying into effect of the objects of this Act, so far as it relates
to the winding up of companies.
(2) There shall be paid in respect of proceedings under this Act
in relation to the winding up of companies such reasonable fees
as the Minister may, by regulation, prescribe.
PART X
RECEIVERS AND MANAGERS
Disqualifica-tion
for appointment 379. (1) A body corporate or any director or secretary of the
as receiver.
company shall not be qualified for appointment as receiver or
manager of the property of a company.
(2) Nothing in this section shall disqualify a body corporate from

acting as receiver if acting under an appointment made before the
appointed date, but subject to the provisions of subsection (1), any
body corporate which acts as receiver shall be guilty of an offence
and shall be liable to a fine not exceeding one thousand rupees.
Disqualifi
380. (1) Where any person being an uncertificated insolvent or
of uncertificated
undischarged bankrupt acts as receiver or manager of the property

insolvent or
undischarged
bankrupt from
of a company on behalf of the debenture holders or other creditors,
acting as receiver
or manager.
he shall, subject to the provisions of subsection (2), be guilty of an

offence and shall be liable to a fine not exceeding five thousand
rupees or to imprisonment of either description for a term not
exceeding two years or to both such fine and imprisonment.
(2) The provisions of subsection (1) shall not apply to a receiver

or manager where—
(a) the appointment under which he acts and the insolvency or
Power to appoint bankruptcy, as the case may be, were both made before the
official receiver as
receiver for
debenture holders appointed date ; or
or creditors.
(b) he acts under an appointment made by order of a court.
381. Where an application is made to the court to appoint a

receiver on behalf of the debenture holders or other creditors of a
Receivers and
company which is being wound up by the court, the official receiver
managers
may be so appointed.
appointed out of
court.
382. (1) A receiver or manager of the property of a company

appointed under the powers contained in any instrument may make
an application to court for directions, in relation to any particular
matter arising in connection with the performance of his functions,
and on any such application the court may give such directions or
may make such order declaring the rights of persons before the
court or otherwise, as the court thinks just.
(2) A receiver or manager of the property of a company appointed
under the provisions of section 381 shall not be personally liable on
any contract entered into by him in the performance of his functions
—
(a) unless his contract otherwise expressly provides ; and
(b) except to the extent so provided, and shall where he is so personally

liable, be entitled in respect of that liability to indemnity out of the
assets to the same extent as if he had been appointed by order of a
court:
Provided that nothing in the preceding provisions of this subsection shall
be taken as limiting any right to indemnity which he would have apart from
this subsection or as limiting his liability or contracts entered into without
authority or as conferring any right to indemnity in respect of that liability.
(3) The provisions of this section shall apply whether the receiver or
manager was appointed before or after the appointed date but the provisions of
subsection (2) shall not apply to contracts entered into before that date.
Notification that 383. (1) Where a receiver or manager of the property of a company has
receiver or
manager been appointed, every invoice, order for goods or business letter issued by or on
appointed.
behalf of the company or the receiver or manager or the liquidator of the
company, being a document on or in which the name of the company appears,
shall contain a statement that a receiver or manager has been so appointed.
(2) Where default is made in complying in the requirments of this section,

the company and any officer, liquidator, receiver or manager of the company
who knowingly and wilfully authorizes or permits such default, shall be guilty
of an offence and shall be liable to a fine of two hundred and fifty rupees.
Power of court to
fix remuneration on 384. (1) the court may, on an application made to the court by the
application of
liquidator. liquidator of a company, by order fix the amount to be paid by way of
remuneration to any person who, under the powers contained in any
instrument, has been appointed as receiver or manager of the property of the
company.
(2) The power of the court referred to in subsection (1) shall, where no
previous order has been made with respect thereto under the provisions of that
subsection)
(a) extend to fixing the remuneration for any period before the making of
the order or the application therefor; and
(b) be exercisable notwithstanding that the receiver or manager had died
or has ceased to act before the making of the order or the
application therefor; and
(c) where the receiver or manager has been paid or has retained
for his remuneration for any period before the making of the order,
any amount in excess of that so fixed for that period, extend to
requiring him or his legal representatives to account for the excess
or such part thereof as may be specified in the order :
Provided that the power conferred by the provisions of paragraph
(c) shall not be exercised with respect to any period before the
making of the application for the order unless in the opinion of the
court there are special circumstances making it proper for the power
to be so exercised.
(3) The court may from time to time on an application made

either by the liquidator or by the receiver or manager vary or amend
an order made under the provisions of subsection (1).
(4) The provisions of this section shall apply whether the receiver
or manager was appointed before or after the appointed date, and to
periods before, as well as to periods after, that date.
Provisions as to
information 385. (1) Where in the case of a company registered in Sri Lanka,
where receiver of
manager
appointed. a receiver or manager of the whole or substantially the whole of the
property of the company (hereafter in this section and in section 386
referred to as "the receiver") is appointed on behalf of the holders of
any debentures of the company secured by a floating charge, then
subject to the provisions of this section and section 386—
(a) the receiver shall forthwith send notice of his appointment to the
company ; and
(b) there shall, within fourteen days from the date of receipt of the
notice, or such longer period, not exceeding three months as may be
allowed by the court or by the receiver or exceeding six months as
may be so allowed with the previous consent of the Registrar, be
made out and submitted to the receiver in accordance with the
provisions of section 386, a statement in the prescribed form as to
the affairs of the company ; and
(c) the receiver shall, within two months from the date 6r receipt of the said
statement send—
(i) to the Registrar and to court a copy of the statement and his
comments, if any, thereon and in the case of the Registrar,
together with a summary of such statement and such comments;
and
(ii) to the company, a copy of any such comments as aforesaid or, if he
does not see fit to make any comment, a notice to that. effect; and
(iii) to any trustees for the debenture holders on whose behalf he was
appointed and, so far as he is aware of their addressess, to all
such debenture holders a copy of the said summary.
(2) The receiver shall within two months, or such longer period as the court may
allow, after the date of expiration of the period of twelve months from the date of
his appointment and of every subsequent period of twelve months, and within two
months or such longer period as the court may allow, after he ceases to act as
receiver or manager of the property of the company, send to the Registrar, to any
trustees for the debenture holders of the company on whose behalf be was
appointed, to the company and to all such debenture holders so far as he is aware
of their addresses, an abstract in the prescribed form showing his receipts and
payments during such period of twelve months of, where he ceases to act as
aforesaid, during the period from the end of the period to which the last preceding
abstract related up to the date of his so ceasing, and the aggregate amounts of his
receipts and of his payments during all preceding periods since his appointment.
(3) Where the receiver is appointed under the powers contained in any
instrument, the provisions of this section shall have effect—
(b) with the omission in subsection (1), of any reference to the court; and
(b) with the substitution in subsection (2), for any reference to the court, of the
reference to the Registrar,
and in any other case any-reference to the court shall be taken as referring to the
court by which the receiver was appointed.
(4) The provisions of subsection (1) shall not apply in relation to the
appointment of a receiver or manager to act with an existing receiver or manager
or in place of a receiver or manager dying or ceasing to act, except that, where
the provisions of that subsection apply to a receiver or manager who dies or
ceases to act before such provisions have been fully complied with, the
references in paragraphs (b) and (c) thereof to the receiver shall, subject to the
provisions of subsection (5), include references to his successor and to any
existing receiver or manager.
Nothing in this subsection shall be taken as limiting the meaning of the
expression " the receiver " where used in or relation, to the provisionsi of
subsection (2).
(5) The provisions of this section and of section 386, shall, where the company
is being wound up, apply notwithstanding that the receiver or manager and the
liquidator are the same person, but with any necessary modifications.
(6) Nothing in subsection (2) shall be taken to prejudice the duty of the receiver
to render proper accounts of his receipts and payments to the persons to whom,
and at the times at which, he may be required to do so other than under the
provisions of that subsection.
(7) Where the receiver makes default in complying with the requirements of this
section, he shall be guilty of an offence and shall be liable to a fine not
exceeding two hundred and fifty rupees for each day during which the default
continues.
Special provisions386. (1) The statement as to the affairs of a company required by the provisions
as to statement of paragraph (b) of subsection (1) of section 385 to be submitted to the receiver
submitted to (or his successor), shall show as at the date of the receiver's appointment, the
receiver.
particulars of the company's assets, debts and liabilities, the names, residences
and occupations of its creditors, the securities held by them respectively, the
date when the securities were respectively given and such further or other
information as may be prescribed.
(2) The statement referred to in subsection (1) shall be submitted by, and be
verified by affidavit of, one or more of the persons who are at the date of the
receiver’s appointment the directors and by the person who is at that date the
secretary of the company, or by such of the persons hereafter in this subsection
referred to as the receiver (or his predecessor), subject to the direction of the
court, may require to submit and verify the statement, that is to say persons-
(a) who are or have been officers of the company;
(b) who have taken part in the formation of the company at any time within
one year prior to the date of the receiver’s appointment;
(c) who are in the employment of the company, or have been in the
employment of the company within the year referred to in paragraph (b) and
are, in the opinion of the receiver, capable of giving the information required;
(d) who or have been within the year referred to in paragraph (b) officers of,
or in the employment of, the company which is, or within such year was, an
officer of the company to which the statement relates.
(3) Any person making the statement and affidavit referred to in subsection
(2) shall be allowed, and shall be paid by the receiver (or his successor ) out of
his receipts such costs and expenses incurred in and about the preparation and
making of the statement and affidavit as the receiver (or his successor), may
consider reasonable, subject to an appeal to the court.
(4) Where the receiver is appointed under the powers contained in any
instrument, the provisions of this section shall have effect with the substitution,
for any reference to the court of the reference to the Registrar and for any
reference to an affidavit, of reference to a statutory declaration ; and in any other
case, any reference to the court shall be taken as referring to the court by which
the receiver was appointed.
(5) If any person without reasonable excuse makes default in complying
with the requirements of this section he shall be guilty of an offence and
shall be liable to a fine not exceeding two hundred and fifty rupees for every
day during which the default continues.
(6) References in this section to the receiver's successor shall include a
continuing receiver or manager.
Companies Act, No. 17 of 1982
387. (1) Except where the provisions of subsection (2) of section 385 applies,
Delivery to
Registrar of every receiver or manager of the property of a company who has been
accounts of
appointed under the powers contained in any instrument shall, within one
receivers and
managers. month, or such longer period as the Registrar may allow, after the expiration
of the period of six months from the date of his appointment and of every
subsequent period of six months, and within one month after he ceases to act
as receiver or manager, deliver to the Registrar for registration an abstract in
the prescribed form showing his receipts and his payments during that period
of six months, or, where he ceases to act as aforesaid during the period from
the end of the period to which the last preceding abstract related up to the date
of his so ceasing, and the aggregate amount of his receipts and of his payments
during all preceding periods since his appointment.
(2) Every receiver or manager who makes default in complying with the
provisions of this section shall be guilty of an offence and shall be liable to a
fine not exceeding two hundred and fifty rupees for every day during which
the default continues.
388. (1) Where—

Enforcement
(a) any receiver or manager of the property of a company who has made
of duty of
receiver or default in filing, delivering or making any account, document or
manager to return or in giving any notice, which a receiver or manager is by law
make returns, required to file, deliver, make or give, fails to make good the default
&c.
within fourteen days from the date of service on him of a notice
requiring him to do so; or
(b) any receiver or manager of the property of a company who has been
appointed under the powers contained in any instrument, has, after
being required at any time by the liquidator of the company so to do,
failed to render proper accounts of his receipts and payments and to
vouch the same and to pay over to the liquidator the amount
properly payable to him,
the court may, on an application in accordance with the provisions of
subsection (2) being made for the purpose, make an order directing the
receiver or manager, as the case may be, to make good the default within such
time as may be specified in the order.
(2) In the case of any such default as is referred to in paragraph (a) of
subsection (1) an application for the purposes of this section may be made by
any member or creditor of the company or by the Registrar and in the case of
any such default as is referred to in paragraph (b) of that subsection, the
application shall be made by the liquidator, and in either case the order may
provide that all the costs of and incidental to the application shall be borne by
the receiver or manager, as the case may be.
(3) Nothing in this section shall be taken to prejudice the operation of any
enactments imposing penalties on receivers in respect of any such default as is
referred in subsection (1).
389. It is hereby declared that, except where the context otherwise requires
Constructi —
on of (a) any reference in this Act to a receiver or manager of the property of a
reference company, or to a receiver thereof, includes a reference to a receiver
to
or manager, or (as the case may be) to a receiver of part of that
receivers
and property and to a receiver only of the income arising from that
managers. property or from part thereof ; and
(b) any reference in this Act to the appointment of a receiver or manager
under powers contained in any instrument includes a reference to an
appointment made under powers which, by virtue of any enactment,
are implied in and have effect as if contained in an instrument.
PART XI
GENERAL PROVISIONS AS TO .REGISTRATION
390. The Registrar may direct a seal or seals to be prepared for the authentication
Authenticatio of documents required for or connected with the registration of companies.
n of documents
by seal.
391. (1) The Registrar may, subject to the provisions of subsections (2) and (3),
Registration
accept and register, or record or file—
of
documents (a) any document which is by any provision of this Act required or authorized to be
copies of registered, or recorded by, or filed with, the Registrar; and
documents,
(b) any document or copy of a document, and any return or notice, which is
by any such provision required or authorized to be sent, forwarded,
given, delivered, produced or in any way notified to the Registrar.
(2) Where the Registrar is not satisfied that any document or copy of a
document or any return or notice is in order or in compliance with the
provisions of this Act, it shall be lawful for him to refuse to register, record or
file such document, copy of a document, return or notice except on an order of
the court.
(3) Where no special provision is made for the payment of a fee in respect
of any registration, recording or filing of any document, copy of a document,
return or notice, the fees prescribed for such purpose shall be paid to the
Registrar in respect of such registration, recording or filing, the fee for filing
being deemed to be the same as the fee for making a record of any fact.
392. Regulations may be made prescribing the fees payable to the Registrar
Fees
for—
(a) the registration of a company limited by shares;
(b) the registration of a company not having a share capital;
(c) the registration of a company limited by guarantee and having a share
capital or an unlimited company having a share capital;
(d) the registration of an increase in the share capital of any company;
(e) the registration of an increase in the membership of a company limited
by guarantee or an unlimited company;
(f) the registration of any existing company except such companies as are
by this Act, exempted from payment of fees in respect of registration
under this Act;
(g) the registration or any document required or authorized to be registered
or required to be delivered sent, given or forwarded to, or filed with, the
Registrar other than the memorandum or abstract required to be
delivered to the Registrar by a receiver or manager, or the statement
required to be sent to the Registrar by the liquidator in winding up in
Sri Lanka ;
(h) the registration of any return or notice required to furnished, sent,
forwarded, given, delivered or be produced to the Registrar ;
(i) the recording of any fact required or authorized by this Act to be recorded
by the Registrar;
(j) the registration of off-shore companies; and
(k) the registration of companies incorporated outside Sri Lanka and carrying
on business within Sri Lanka.
PART XII
APPLICATION OF ACT TO COMPANIES

FORMED OR REGISTERED UNDER FORMER
WRITTEN LAW
393. In the application of the provisions of this Act to existing companies, it
shall apply in the same manner—
(i) In the case of a limited company, other than a company limited by
guarantee, as if the company had been formed and registered
under the provisions of this Act as a company limited by shares;
(ii) in the case of a company limited by guarantee, as if the company had
been formed and registered under the provisions of this Act as a
company limited by guarantee; and
(iii) in the case of a company other than a limited company, as if the
company had been formed and registered under the provisions of
this Act as an unlimited company:
Provided that—
(a) nothing in the provisions of Table A of the First Schedule hereto shall
apply to a company formed and registered under any written law repealed by
this Act unless adopted by special resolution of the company; and
(b) any reference, express or implied, to the date of registration shall be
construed as a reference to the date on which the company was registered
under any written law repealed by this Act
PART XIII
COMPANIES INCORPORATED OUTSIDE SRI

LANKA CARRYING ON BUSINESS WITHIN
SRI LANKA
Companie 394. Subject to the provisions of the Companies (Special Provisions) Law, No.
s to which 19 of 1974, the provisions of this Part shall apply to all companies
Part XIII incorporated outside Sri Lanka which, after the appointed date, establish a
applies.
place of business within Sri Lanka, and to all companies incorporated outside
Sri Lanka which have, before the appointed date, established a place of
business within Sri Lanka and continue to have an established place of
business within Sri Lanka on the appointed date.
395. (1) Every company incorporated outside Sri Lanka which, after the
Documents
&c., to be appointed date, establishes a place of business within Sri Lanka, shall within
delivered one month from the date of establishment of the place of business, deliver to
to the Registrar for registration—
Registrar
(a) a certified copy of the charter, statutes or memorandum and articles of
by
companies the company, or other instrument constituting or defining the
carrying constitution of the company, and, where such instrument is not in the
on official language of Sri Lanka, in such language as may be specified
business in
by the Registrar;
Sri Lanka.
(b) a list of the directors of the company, containing such particulars with
respect to the directors as are by this Act, required to be contained
with respect to directors in the register of the directors of a company;
(c) the names and addresses of some one or more persons resident in Sri
Lanka authorised to accept on behalf of the company service of
process and any notices required to be served on the company ;
(d) a statement containing the full address of —-
(i) the registered or principal office of the company; and
(ii) the principal place of business of the company within Sri
Lanka:
(e) a certified copy, certified of recent date, of the incorporation of the
company:
Provided, however, that the Registrar may, upon sufficient cause being
shown by the defaulting company, extend the aforesaid period of one month.
(2) Every company incorporated outside Sri Lanka which, on or before the
appointed date, establishes or has established a place of business within Sri
Lanka shall, subject as hereinafter provided, within a period of one month
from that date, deliver to the Registrar for registration the documents and
particulars specified in subsection (1) :
Provided that where any such company has filed with the Registrar appointed
under the Joint Stock Companies Ordinance, 1861, the particulars required to
be filed under section 111 of that Ordinance, it shall be sufficient for such
company to deliver to the Registrar for registration, within the period
aforesaid, only the particulars specified in paragraph (d) of subsection (1); and
where any such company so delivers such particulars, it shall be deemed for
all the purposes of this Act, to have delivered to the Registrar all the
documents and particulars specified in subsection (1), in accordance with the
provisions of this subsection:
Provided also that where the documents and particulars specified in subsection
(1) have, at any time between the 31st day of March, 1939, and the aforesaid
period of one month, been delivered by any such company to the Registrar and
accepted by the Registrar for registration, the company shall be deemed for all
the purposes of this Act, to have delivered to the Registrar the documents and
particulars specified in subsection (l), in accordance with the provisions of this
subsection:
Provided further that the Registrar may extend the aforesaid period of one
month if it appears to him expedient so to do having regard to the
circumstances of any particular case.
396. A company incorporated outside Sri Lanka which has delivered to the
Registrar the documents and particulars specified in subsection (1) of section
Power of 395 have the same power to hold lands in Sri Lanka as if it were a company
companies incorporated under this Act.
in-
corporated
outside Sri 397. Where in the case of any company to which this Part applies any
Lanka to alteration is made in—
hold lands. (a) the charter, statutes, or memorandum and articles of the company or
any such instrument as aforesaid ; or
(b) the directors of the company or the particulars contained in the list of
the directors; or
Return to
be
delivered
to
Registrar
where
documents,
&c. altered.
(c) the names and addresses of the persons authorized to accept service on
behalf of the company ; or
(d) the address of—
(i) the registered or principal office of the company ; or
(ii) the principal place of business of the company within Sri
Lanka,
the company shall, within the prescribed time, deliver to the Registrar for
registration a return containing the prescribed particulars of the alteration.
398. (1) Every company to which this Part applies, shall in every calendar year
Accounts of a
company to make out a balance sheet and profit and loss account, and, where the company
which this Part is a holding company, group accounts, in such form and containing such
applies.
particulars and including such documents, as under the provisions of this Act
(subject, however, to any prescribed exceptions) it would, if it had been a
company of the same description within the meaning of this Act, have been
required to make out and lay before the company at a general meeting, and
deliver certified copies of those documents to the Registrar for registration.
(2) Where any such document as is referred to in subsection (1) is not in the
official language of Sri Lanka, there shall be annexed to it a translation thereof
in a language specified by the Registrar and certified in the prescribed manner.
Obligation to 399. Every company to which this Part applies shall—

state name of
(a) in every prospectus inviting subscriptions for its shares or debentures in
company,
whether limited, Sri Lanka state the country in which the company is incorporated; and
and country
(b) conspicuously exhibit on every place where it carries on business in Sri
where
incorporated. Lanka the name of the company and the country in which the
company is incorporated; and
(c) cause the name of the company and of the country in which the
company is incorporated to be stated in legible characters in all bill-
heads and letter paper, notices, advertisements and other official
publications of the company; and
(d) where the liability of the members of the company is limited, cause
notice of that fact to be stated in legible characters in every such
prospectus as aforesaid and in all bill-heads, letter paper, notices,
advertisements and other official publications of the company in Sri
Lanka and to be affixed on every place where it carries on its
business.
400. Any process or notice required to be served on a company to which this

Service on Part applies shall be sufficiently served if addressed to any person whose
company to name has been delivered to the Registrar under this Part and left at or sent by
which Part post to the address which has been so delivered:
XIII
applies. Provided that—
(a) where any such company makes default in delivering to the Registrar
the name and address of a person resident in Sri Lanka who is
authorized to accept on behalf of the company service of process or
notices; or
(b) where at any time all the persons whose names and addresses have been
so delivered are dead or have ceased so to reside, or refuse to accept
service on behalf of the company, or for any reason cannot be
served,
a document may be served on the company by leaving it at or sending it by
post to any place of business established by the company in Sri Lanka.
401. Where any company to which this Part applies, ceases to have a place of
business in Sri Lanka, it shall forthwith give notice of the fact to the Registrar,
and as from the date on which notice is so given the obligation of the company
to deliver any document to the Registrar shall cease.
Registrar
to be
notified 402. Where any company to which this Part applies fails to comply with any
Penalties
when of the preceding provisions of this Part, the company, and every officer or
company
agent of the company, who knowingly and wilfully authorizes or permits such
ceases to
have place default shall be guilty of an offence and shall be liable to a fine not exceeding
of business five hundred rupees, or in the case of a continuing offence two hundred and
in Sri fifty rupees for every day during which the default continues.
Lanka.
403. (1) Where any company to which the provisions of this Part apply,
Enforcement
of duty to having made default in complying with any such provision, fails to make good
comply with
the default within fourteen days from the date of service of a notice on the
the provisions
of this Part. company requiring it to do so, the court many, on an application made to the
court by the Registrar or by any creditor of the company or by any other
person who may appear to the court, to be interested, make an order directing
the company and any officer thereof to make good the default within such
time as may be specified in the order.
(2) Any order made under the provisions of subsection (1) may provide
that all costs of and incidental to the application shall be borne by the
company or by any officer of the company responsible for the default.
enactment imposing penalties on a company or its officers in respect of any
default referred to in subsection (1).
404. For the purposes of this Part the expressions—

Interpretation
of Part XIII. (a) "certified" means certified in the prescribed manner to be a true copy
or a correct translation ;
(b) "director" in relation to a company includes any person in accordance
with whose directions or instructions the directors of the company
are accustomed to act;
(c) "place of business" includes a share transfer or share registration
office;
(d) "prospectus" has the same meaning as when used in relation to a
company incorporated under this Act;
(e) "secretary" includes any person occupying the position of secretary by
whatever name called.
RESTRICTIONS ON SALE OF SHARES AND OFFER
OF SHARE FOR SALE
Dating of 405. (1) It shall not be lawful for any person to issue, circulate, or
prospectus and distribute in Sri Lanka any prospectus offering for subscription any shares in
particulars to
be contained or debentures in a company, incorporated or to be incorporated, outside Sri
therein. Lanka whether the company has or has not established, or when formed will
or will not establish, a place of business in Sri Lanka, unless the prospectus is
dated and—
(a) contains particulars with respect to the following matters:—
(i) the instrument constituting or defining the constitution of the
company;
(ii) the enactments or provisions having the force of an enactment,
by or under which the incorporation of the company was
effected ;
(iii) an address in Sri Lanka where the said instrument, enactments,
or provisions or copies thereof and it the same are in a
language other than the official language of Sri Lanka a
translation thereof in a language specified by the Registrar
certified in the prescribed manner, can be inspected;
(iv) the date on which and the country in which the company was
incorporated;
(v) whether the company has established a place of business in Sri
Lanka, and, if so, the address of its principal office in Sri
Lanka;
(b) states the matters specified in Part I of the Third Schedule hereto and,
subject to the provisions contained in Part III, sets out the reports
specified in Part II of that Schedule:
Provided that the provisions of sub-paragraphs (i), (ii) and (iii) of paragraph
(a) shall not apply in the case of a prospectus issued more than two years from
the date on which the company is entitled to commence business and, in the
application of Part I of the Third Schedule hereto for the purposes of this
subsection, paragraph 3 of Part I of such Schedule shall have effect with the
substitution, for the reference to the articles, of a reference to the constitution,
of the company.
(2) Any condition requiring or binding an applicant for shares or debentures to
waive compliance with any requirements imposed by virtue of paragraph (a)
or paragraph (b) of subsection (1) or purporting to affect him with notice of
any contract, document, or matter not specifically referred to in the
prospectus, shall be void.
(3) It shall not be lawful for any person to issue to any person in Sri Lanka a
form of application for shares in or debentures of such a company or intended
company as is referred to in subsection (1) unless the form is issued with 'a
prospectus which complies with this Part and the issue whereof in Sri Lanka
does not contravene the provisions of subsection (1) of section 406:
Provided that the provisions of this subsection shall not apply where it is
shown that the form of application was issued in connection with a bona fide
invitation to a person to enter into an underwriting agreement with respect to
the shares or debentures.
(4) In the event of non-compliance with or contravention of any of the
requirements imposed by paragraphs (a) and (b) of subsection (1), a director or
other person responsible for the issue of the prospectus shall not incur any
liability by reason of such non-compliance or contravention, where—
(a) as regards any matter not disclosed, he proves he was not cognizant
thereof; or
(b) he proves that such non-compliance or contravention arose from a
bona fide mistake of fact on his part; or
(c) such non-compliance or contravention was in respect of matters
which, in the opinion of the court dealing with the case, were
immaterial or were otherwise such as ought, in the opinion of
that court having regard to all the circumstances of the case,
reasonably to be excused:
Provided that, in the event of failure to include in a prospectus a statement
with respect to the matters contained in paragraph 17 of the Third Schedule
hereto, no director or other person shall incur any liability in respect of the
failure unless it be proved that he had knowledge of the matters not disclosed.
(5) The provisions of this section—
(a) shall not apply to the issue to existing members or debenture holders of
a company, of a prospectus or form of application relating to
shares in or debentures of the company, where an applicant for
shares or debentures has or does not have right to renounce in
favour of other persons; and .
(b) except in so far as it requires a prospectus to be dated, shall not apply to
the issue of a prospectus relating to shares or debentures which
are or are to be in all respects uniform with the shares or
debentures previously issued,
but, subject as aforesaid, the provisions of this section shall apply to a
prospectus or form of application whether issued on, or with reference to, the
formation of a company or subsequently.
(6) Nothing in this section shall limit or diminish any liability which any
person may incur under the provisions of this Act other than this section.
406. (1) It shall not be lawful for any person to issue, circulate or distribute in
Provisions Sri Lanka any prospectus offering for subscription shares in or debentures of a
as to company incorporated outside Sri Lanka, whether the company has or has not
expert's
established, or when formed will or will not establish, a place of business in
consent
and Sri Lanka—
allotment. (a) if, where the prospectus includes a statement purporting to be made by
an expert, he has not given, or has before delivery of the prospectus
for registration withdrawn, his written consent to the issue of the
prospectus with the statement included in the form and context in
which it is included or there does not appear in the prospectus a
statement that he has given and has not withdrawn his consent as
aforesaid; or
(b) if the prospectus does not have the effect, where an application is made
in pursuance thereof, of rendering all persons concerned bound by
all the provisions other than penal provisions of section 52 so far as
applicable thereto.
(2) In this section, the expression "expert" includes an engineer, a valuer, an
accountant and any other person whose profession gives authority to a
statement made by him, and for the purposes of this section a statement shall ;
be deemed to be included in a prospectus if it is contained in, or in any report
or memorandum appearing on the face of or by reference incorporated in, or
issued with, such prospectus.
407. It shall not be lawful for any person to issue, circulate or distribute in Sri
Lanka any prospectus offering for subscription shares in or debentures of a
company incorporated or to be incorporated outside Sri Lanka whether the
Registrati company has or has not established, or when formed will or will not establish,
on a place of business in Sri Lanka, unless before the issue, circulation or
of pros-
pectus. distribution of the prospectus in Sri Lanka, a copy thereof certified by the
chairman of the company as having been approved by resolution of the
managing body has been so delivered and there is endorsed on or attached to
the copy—
(a) any consent to the issue of the prospectus required by the provisions
of section 406 ; and
(c) where the persons making any report in accordance with Part II of the
Third Schedule hereto have made therein or have without giving
reasons, indicated therein any such adjustments as are mentioned in
paragraph 30 of that Schedule, a written statement signed by those
persons setting out the adjustments and giving the reasons therefor.
408. Any person who is knowingly responsible for the issue, circulation or
Penalty distribution of a prospectus, or for the issue of a form of application for shares
for
or debentures, in contravention of any of the provisions of section 405, section
contrave
ntion of 406, or section 407 shall be guilty of an offence and shall be liable to a fine
section not exceeding five thousand rupees.
405,
section
409. The provisions of section 45 shall extend to every prospectus offering for
406 or
section subscription shares in or debentures of a company incorporated or to be
407. incorporated outside Sri Lanka, whether the company has or has not
established, or when formed will or will not establish, a place of business in
Sri Lanka, with the substitution, for any reference to section 41, of the
reference to section 406.
410. (1) Where any document by which shares in or debentures of a company

Civil
incorporated outside Sri Lanka are offered for sale to the public would, where
liability
for mis- the company concerned had been a company within the meaning of this Act,
Interpreta-
state- have been deemed by virtue of the provisions of section 47 to be a prospectus
tion of in
ments issued by the company, that document shall be deemed to be, for the purposes
provisions
prospectu
ass.to of this Part, a prospectus issued by the company.
prospectuse (2) An offer of shares or debentures for subscription or sale to any person
s.
whose ordinary business it is to buy or sell shares or debentures whether as
principal or agent shall not be deemed to be an offer to the public for the
purposes of this Part
(3) In this Part, the expressions "prospectus", "shares" and "debentures"
shall have the same meanings as and when used in relation to a company
incorporated under this Act.
PART XIV
PROVISIONS RELATING TO BANKS

411. A "banking company" means a company which carries on as its principal
business the accepting of deposits of money, subject to withdrawal on demand
by cheque, draft, order or otherwise, notwithstanding that it engages in any
one or more of the following forms of business, namely :—
(a) the borrowing, raising or taking up of money ; the lending or advancing
of money either upon or without security ; the drawing, making,
accepting, discounting, buying, selling, collecting and dealing in
bills of exchange, hoondees, promissory notes, coupons, drafts,
bills of lading, railway receipts, warrants, debentures, certificates,
scrips and other instruments, and securities whether transferable or
negotiable or not; the granting and issuing of letters of credit,
traveller's cheques and circular notes; the buying, selling and
dealing in bullion and specie ; the buying and selling of foreign
exchange including foreign bank notes, the acquiring, holding,
issuing on commission, under writing and dealing in stock, funds,
shares, debentures, debenture stock, bonds, obligations, securities
and investments of all kinds, the purchasing and selling of bonds,
scrips or other forms of securities on behalf of constituents or
others ; the negotiating of loans and advances ; the receiving of all
kinds of bonds, scrips or valuables an deposit, or for safe custody
or otherwise and the carrying on of the business of safe deposit; the
collecting and transmitting of money and securities ;
(b) acting as agents for Governments or local authorities or for any other
person or persons ; the carrying on of agency business of any
description other than the business of a managing agent of any
company, which is not a banking company, but including the clear-
ing and forwarding of goods, the power to act as attorneys and to
give discharges and receipts ;
(c) contracting for public and private loans and negotiating and issuing the
same ;
(d) the promoting, effecting, insuring, guaranteeing, underwriting,
participating in managing and carrying out of any issue, public or
private, of State, municipal or other loans or of shares, stock,
debentures, or debenture stock of any company, corporation or
association and the lending of money for the purpose of any such
issue;
(e) carrying on and transacting every kind of guarantee and indemnity
business;
(f) promoting or financing or assisting in promoting or financing any
business undertaking or industry, either existing or new, and
developing or forming the same either through the instrumentality of
syndicates or otherwise;
(g) acquisition by purchase, lease, exchange, hire or otherwise of any
property immovable or movable and any rights or privileges which
the company may think necessary or convenient to acquire or the
acquisition of which in the opinion of the company is likely to
facilitate the realization of any securities held by the company or to
prevent or diminish any apprehended loss or liability ;
(h) managing, selling and realizing all property movable and immovable
which may come into the possession of the company in satisfaction
or part satisfaction of its claims;
(i) acquiring and holding and generally dealing with any property and any
right, title or interest in any property movable or immovable which
may from the security or part of the security for any loans or
advances or which may be connected with any such security;
(j) undertaking and executing trusts;
(k) undertaking the administration of estates as executor, trustee or
otherwise;
(l) taking or otherwise acquiring and holding shares in any other company
having objects similar to those of the company;
(m) establishing and supporting or aiding in the establishment and support
of associations, institutions, funds, trusts and conveniences calculated
to benefit employees or ex-employees of the company or the de-
pendants or connections of such persons ; granting pensions and
allowances and making payments towards insurance; subscribing to
or guaranteeing moneys for charitable or benevolent objects or for
any exhibition or for any public, general or useful object;
(n) the acquisition, construction, maintenance and alteration of any
building or works necessary or convenient for the purposes of the
company ;
(o) selling, improving, managing, developing, exchanging, leasing,
mortgaging, disposing of or turning into account or otherwise dealing
with all or any part of the property and rights of the company ;
(p) acquiring and undertaking the whole or any part of the business of
any person or company when such business is of a nature enumerated
or described in this section;
(q) doing all such other things as are incidental or conducive to the
promotion or advancement of the business of the company;
(r) engaging in management consultancy services;
(s) providing for the training in banking, accounting, valuation, project
and credit appraisal and allied subjects;
(t) engaging in the business of hire-purchase services, factoring, leasing
and warehousing;
(u) providing for medium and long term credit for development.
Registratio 412. (1) No company, association, or partnership shall carry on the business
n on the of banking unless it is registered as a public company under this Act.
carrying (2) No company, association or partnership which is formed outside Sri
on of
Lanka shall carry on the business of banking in Sri Lanka unless—
ensuing
business. (a) it is formed in pursuance of some written law of the Government of a
foreign country, Royal Charter or Letters Patent or is duly
incorporated as a banking company outside Sri Lanka, and
(b) has an established place of business in Sri Lanka and has complied with
the provisions of Part XIII of this Act.
(3) Where any company, association or partnership carries on the business
of banking in contravention of the provisions of subsection (1) or subsection
(2), each of such persons— '
(a) shall be guilty of an offence and shall be liable to a fine not exceeding
five hundred rupees or to imprisonment of either description for a
term not exceeding three months or to both such fine and
imprisonment; and
(b) shall, without prejudice to the provisions of paragraph (a), be severally
liable for the payment of the whole debts of the company,
association or partnership of which he is or was a member, and may
be sued accordingly without the joinder in the suit of any other
member of the company, association or partnership.
413. (1) No company formed after the appointed date for the purpose of
Limitation
of carrying on business as a banking company or which uses as part of the name
activities under which it proposes to carry on business the word "bank", "banker" or
of banking "banking" shall be registered under this Act, unless the memorandum limits
companies
the objects of the company to the carrying on of the business of accepting
.
deposits of money subject to withdrawal on demand by cheque, draft, order or
otherwise along with some or all of the forms of business specified in section
411.
(2) No company other than a banking company shall use as part of its name or
its description any of the words "banks", "banker" or "banking" or any other
derivative or their equivalent in another language and no company shall carry
on the business of banking in Sri Lanka unless it uses as part of its name at
least one of such words :
Provided that a banking company formed outside Sri Lanka and carrying on
the business of banking and whose name does not contain the words "bank", "
banker" or "banking" in any language may carry on such business in Sri Lanka
notwithstanding the ommission of these words in its name.
(3) No firm, individual or group of individuals shall, for the purpose of
carrying on any business, use as part of its or his name or description any of
the words "bank", "banker" or "banking" or any of their derivatives or their
equivalent in another language.
(4) No banking company incorporated, in Sri Lanka, and no banking company
incorporated outside Sri Lanka which has established a place of business
within Sri Lanka, shall after the expiry of two years from the appointed date
carry on any form of business other than those specified in section 411:
Provided that the Minister may, having regard to the national interest and in
the interest of the national economy, by notification published in the Gazette
specify, in addition to the business specified in section 411, other forms of
business which it may be lawful under this Part for a banking company to
engage in.
Banking
company
not to 414. No banking company shall, after the expiry of two years from the
employ appointed date, employ or be managed by a managing agent other than a
managing
banking company.
agent
other than a
banking 415. Notwithstanding anything contained in section 107, no banking company
company. shall commence business unless it satisfies such capital requirements as may
be determined from time to time by the Central Bank of Ceylon having regard
to the interest of the national economy.
Prohibition 416. No banking company shall create any charge upon any unpaid capital
of charge on of the company, and any such charge shall be invalid.
unpaid
capital.
417. (1) Every banking company shall, after the appointed date, maintain a
Reserve
fund. reserve fund.
(2) Every banking company shall out of the declared profits of each year
and before any dividend is declared transfer to the reserve fund—
(a) a sum equivalent to not less than twenty per centum of such profits
until the amount of the said reserve fund is equal to fifty per
centum of the paid-up capital; and
(b) thereafter, in every year in which the liabilities exceed the paid-up
capital, a sum equivalent to not less than ten per centum of such
profits until the amount of the said reserve fund is equal to the
paid-up capital.
(3) A banking company shall invest the amount standing to the credit of
its reserve fund in securities mentioned in section 20 of the Trusts Ordinance
or in any approved security or keep such amount deposited in a special
account to be opened by the company for the purpose in any prescribed
banking company:
Provided that the provision of this subsection shall not apply to a banking
company incorporated before the appointed date till after the expiry of two
years from such date.
(4) In this section "approved security" means any security approved by the
Minister by notification published in the Gazette-
(5) Subject as hereinafter provided, the preceding provisions of this section
shall apply to every banking company in incorporated in Sri Lanka and to
every banking company incorporated outside Sri Lanka which has an
established place of business within Sri Lanka:
Provided, however, that such provisions shall not apply to any prescribed
banking company.
Restriction on 418. (1) A banking company shall not form any subsidiary company which is
nature of not a banking company.
subsidiary
company. (2) Save as provided in subsection (1), a banking company shall not hold
shares in any company whether as pledgee, mortgagee or absolute owner of an
amount exceeding forty per centum of the issued share capital of that
company:
Provided that nothing in this subsection shall apply to shares held by a
banking company before the appointed date.
Penalty for 419. Where default is made in complying with any of the requirements of
default in section 413, section 414, section 415, section 416, section 417 or section 418,
complying
with certain every director or other officer of the company who is knowingly and wilfully a
requirements party to the default shall be guilty of an offence and shall be liable to a fine not
of this Part.
exceeding five hundred rupees for every day during which the default
continues.
Power of court 420. (1) The court may, on the application of a banking company which is
to stay temporarily unable to meet its obligations, make an order staying the
proceedings.
commencement or continuance of all actions and proceedings against the
company for a fixed period of time on such terms and condition as it shall
think fit and proper and may from time to time extend the period.
(2) No application shall be made under the provisions of subsection (1),
unless it is accompanied by a report of the Director of Bank Supervision of the
Central Bank of Ceylon :
Provided, however, that the court may, for sufficient reasons grant interim
relief, even if such application is not accompanied by such report.
(3) The provisions of this section shall apply to every banking company
incorporated in Sri Lanka and every banking company formed outside Sri
Lanka which has an established place of business within Sri Lanka.
421. For the purposes of this Part, "the business of banking " means the
business of accepting deposits of money, subject to withdrawal on demand by
Definition
of " cheque, draft, order or otherwise whether or not such business is carried on
business of along with any one or more of the forms of business specified in section 411.
banking ".
PART XV
CONSTITUTION AND POWERS OF ADVISORY COMMISSION
422. (1) For the purposes of advising the Minister on any matter referred to
him in relation to the law relation to companies, the Minister may—
(a) constitute a Commission (hereinafter referred to as the "Advisory
Appointme Commission") consisting of not less than five and not more than ten
nt &c. of persons with suitable qualifications ; and
Advisory
(b) appoint one of such persons to be Chairman of the said Advisory
Commissio
n. Commission.
(2) It shall be the duty of the Advisory Commission—
(a) to inquire into and report to the Minister on any matter or question
relating to companies and the law applicable to companies as may
be referred to it by the Minister from time to time ; .
(b) to review the law relating to and applicable to, companies from time to
time and to make proposals to the Minister for the alteration,
modification or addition to such law ;
(c) in making the recommendations referred to in paragraph (a) or (b) to
consult and take into consideration where the Advisory Commission
deems necessary the views of trade chambers, professional
organizations, monetary institutions, governmental authorities and
the general public.
20-A 63752 (82/06)
(3) The Registrar shall be an ex officio member of the Advisory
Commission and shall also function as its Convenor and Secretary.
(4) The Minister may give special or general directions in writing as to

the performance of the duties and the exercise of the powers of the Advisory
Commission, and the Advisory Commission shall give effect to such
directions.
(5) (a) Subject to the provisions of subsection (6), the term of office of
the members of the Advisory Commission shall be three years:
Provided that a member appointed in place of a member who resigns or
is removed or otherwise vacates office, shall hold office for the unexpired
part of the term of office of the member whom he succeeds.
(b) Any member of the Advisory Commission who vacates office by
effluxion of time shall be eligible for reappointment.
(6) (a) A member of the Advisory Commission may resign from office
by letter addressed to the Minister.
(b) All members of the Advisory Commission may resign from office by
letter addressed to the Minister.
(c) Where a member is temporarily unable to discharge the duties of his
office on account of ill health, absence from Sri Lanka or any other cause,
the Minister may appoint some other person to act as member in his place.
(7) The Advisory Commission may, with the approval of the Minister,
appoint such officers and servants to assist the Advisory Commission in
carrying out its duties under this Part.
(8) The members of the Advisory Commission, its Secretary and other
officers and servants may be paid such remuneration out of the Fund as
may be determined by the Minister.
PART XVI
MISCELLANEOUS
APPOINTMENT OF OFFICERS, &C.
423. (1) There may be appointed-—
(a) a person, by name or by office, to be or to act as the Registrar of
Companies ;
(b) a person, by name or by office, to be or to act as the Deputy
Registrar of Companies ;
(c) persons, by name or by office, to be or to act as Assistant
Registrars; and
(d) such other officers and servants as may from time to time be
required for the purposes of this Act.
(2) Any person appointed under the provisions of subsection (1) to be or to
act as the Deputy or an Assistant Registrar of Companies, may subject to the
general directions of the Registrar, exercise all the powers, perform all the
duties and discharge all the functions of the Registrar under the Act.
424. Where any document filed with, or in the custody of, the Registrar is
Copies of
damaged or is in danger of becoming illegible, the Registrar may, if he thinks
damaged fit, direct a copy thereof to be made, verified, and certified in any such manner
or illegible as he may determine, and thereupon such copy shall be substituted for, and
shall for all purposes of this Act be deemed to be, the document so damaged
or in danger of becoming illegible.
FUND
425. (1) For the purposes of this Act there shall be established a Fund which
Fund. shall be maintained in such manner as the Secretary to the Ministry of the
Minister in charge of the subject of Trade in consultation with the Registrar
may direct.
(2) There shall be paid into the Fund two-thirds of every fee or charge
prescribed, levied or recovered under this Act by the Registrar.
(3) One-third of every fee or charge prescribed, levied or recovered under this
Act by the Registrar shall be paid into the Consolidated Fund.
(4) There shall be paid out of the Fund referred to in subsection (1), all sums
of money required to defray any expenditure incurred by the Registrar in the
exercise, discharge and performance of his powers, functions and duties under
this Act and all sums of money as are required to be paid out of such Fund by
or under this Act or any regulation made thereunder.
(5) The Secretary to the Ministry of the Minister in charge of the subject of
Trade shall as soon as possible after the end of each financial year prepare a
report on the administration of the Fund and shall cause to be maintained a full
and appropriate account of the Fund in respect of each financial year.
(6) The Auditor-General shall audit the accounts of the Fund in accordance
with Article 154 of the Constitution.
PROHIBITION OF PARTNERSHIP WITH MORE THAN TWENTY

MEMBERS
426. (1) No company, association, or partnership consisting of more than
Prohibition twenty persons which is formed outside purpose of carrying on any business
of
that has for its object the acquisition of gain by the company, association or
partnership
with more partnership, or by the individual members thereof, unless it is registered as a
than company under this Act or under some other enactment.
twenty (2) No company, association or partnership consisting of more than twenty
members.
persons, which is formed outside Sri Lanka, shall carry on in Sri Lanka any
business that has for its object the acquisition of gain by the company,
association or partnership or by the individual members thereof unless—
(a) it is duly incorporated as a company outside; and
(b) has an established place of business within, Sri Lanka.
(3) Where any company, association or partnership consisting of more than
twenty persons is formed in contravention of the provisions of subsection (1)
or carries on any business in contravention of the provisions of subsection (2),
each of such persons—
(a) shall be guilty of an offence and shall be liable to a fine not exceeding
five hundred rupees or to imprisonment of either description for a
term not exceeding three months or to both such fine and imprison-
ment ; and
(b) shall, without prejudice to the provisions of paragraph (a), be severally
liable for the payment of the whole debts of the company, association
or partnership of which he is or was a member, and may be sued
accordingly without the joinder in the suit of any other member of the
company, association or partnership.
INSPECTION AND PRODUCTION OF DOCUMENTS,

ENFORCEMENT ON DUTY OF COMPANIES TO MAKE RETURNS
AND THE PROCUCTION AND INSPECTION OF BOOKS
427. (1) Any person may-
Inspection, (a) inspect the documents kept by the Registrar on payment of such fee, as
production
and evidence may be prescribed;
of documents (b) require a certificate of the incorporation of any company, or a copy or
kept by
extract of any other document or any part of any other document
Registrar.
to be certified by the Registrar, on payment for the certificate,
certified copy or extract of such fees as may be prescribed:
Provided that the right conferred by the provisions of this subsection shall not
extend to any document annexed to an annual return referred to in sections
123 and 124 to any private company, other than a private company which is a
subsidiary of a public company unless the person applying for the inspection
or requiring a copy or extract of any document aforesaid, is a member or
creditor of that company :
Provided further that the right conferred by the provisions of paragraph (a) of
this subsection shall not extend to any copy sent to the Registrar under section
385 of a statement as to the affairs of a company or of any comments of the
receiver or his successor or a continuing receiver or manager thereon, but only
to the summary thereof, except where the person claiming the right either is,
or is the agent of, a person stating himself in writing to be a member or
creditor of the company to which the statement relates, and the right conferred
by the provisions of paragraph (b) of this subsection shall be similarly limited.
(2) No process for compelling the production of any document kept by the
Registrar shall issue from any court except with the leave of that court, and
any such process if issued shall bear thereon a statement that it is issued with
the leave of the court.
(3) A copy of, or extract from, any document kept and registered at any of
the offices for the registration of companies in Sri Lanka, certified to be a true
copy under the hand of the Registrar shall in all legal proceedings be
admissible in evidence as of equal, validity with the original document.
(4) Any person untruthfully stating himself in writing for the purposes of
the proviso to subsection (1) to be a member or creditor of a company shall be
guilty of an offence and shall be liable to a fine not exceeding five hundred
rupees.
428. (1) Where a company having made default in complying with any
Enforcemen
t of duty of provision of this Act, which requires it to file with, deliver or send to the
company to Registrar any account, document or return, or to give notice to him of any
make matter, fails to make good the default within fourteen days from the date of
returns to
service of a notice on the company requiring it to do so, the court may, on an
Registrar.
application made to the court by any member or creditor of the company or by
the Registrar, make an order directing the company and any officer thereof to
make good the default within such time as may be specified in the order.
(2) Any such order may provide that all costs of and incidental to the
application shall be borne by the company or by any officer of the company
responsible for the default.
enactment imposing penalties on a company or its officers in respect of any
such default as aforesaid.
Unlawful 429. Any person who, being or having been employed in the Department of
disclosure the Registrar, communicates any information relating to any documents filed
of by a company, under the provisions of this Act with the Registrar or matters
information connected therewith obtained by him during the course of his employment in
relating to
or at the Department of the Registrar to any person not entitled or authorized
to receive such information, or makes any other unlawful use of such informa-
tion, shall be guilty of an offence, and shall be liable to a fine not exceeding
twenty thousand rupees or to imprisonment for a term not exceeding twelve
months or to both such fine and such imprisonment.
279 Companies Act, No. I7 of 1982
430. (1) Where on an application made to a Magistrate in chambers by the
Production and Attorney-General, the Registrar or any officer of police not below the rank of
Inspections of
books Assistant Superintendent, there is shown to be reasonable cause to believe that
where offence any person has, whilst being an officer of a company, committed an offence in
suspected. connection with the management of the company's affairs and that evidence of
the commission of the offence is to be found in any books or papers of or
under the control of the company, an order may be made—
(a) authorizing any person named therein to inspect the said books or
papers or any of them for the purpose of investigating and
obtaining evidence of the offence; or
(b) requiring the secretary of the company or such other officer thereof as
may be named in the order to produce the said books or papers or
any of them to a person named in the order at a place so named.
(2) The provisions of subsection (1) shall apply also in relation to any
books or papers of a person carrying on the business of banking so far as
they relate to the company’s affairs, as it applies to any books or papers, of
or under the control of the company, except that no such order as is referred
to in paragraph (b) of that subsection shall be made by virtue of the
provisions of this subsection.
(3) An appeal shall not lie from a decision of a Magistrate on an
application made under the provisions of this section.
431. (1) The Registrar may, by written notice, direct any company—
(a) to furnish before a date specified in the notice such information
relating to the company as the Registrar may require for any
Registrar’s
power to call for purpose of this Act or such information or explanations as the
information and Registrar may by the notice require in respect of any particulars
to inspect books, stated in any return, declaration, or other document furnished by the
registers and
company; and
documents.
280 Companies Act, No. I7 of 1982
(i) which have or should have been stated in any return, declaration or
other document furnished by the company; or
(ii) which should have been stated in any return or other document which
should have, but actually has not, been furnished by the
company ;
as at the date or dates specified in the notice; and
(b) to produce before a date specified in the notice any book, register or
other document kept or required to be kept by the company in
connection with its business or transactions.
(2) Where default is made in complying with any direction given by the
Registrar under the provisions of subsection (1), the company and every
officer of the company who is in default shall be guilty of an offence and shall
be liable to a default fine.
432. Where the Registrar considers it necessary for any purpose under this Act
Powers of Registrar
to carry out to carry out an investigation or to conduct an inquiry into the affairs of a
investigations or company, he may appoint one or more competent inspectors to investigate or
conduct inquiries inquire into the affairs of such company, and to report thereon in such manner
as the Registrar directs ; and the provisions of sections 163, 164 and 165 shall,
mutatis mutandis, apply in any such instance.
MISCELLANEOUS OFFENCES
433. Where any person in any return, report, certificate, balance sheet, or
Penalty for false
statement. other document, required by or for the purpose of any of the provisions of this
Act specified in the Ninth Schedule hereto, wilfully makes a statement false in
any material particular, knowing it to be false, he shall be guilty of an offence,
and shall be liable to a fine not exceeding twenty thousand rupees or to
imprisonment of either description for a term not exceeding one year or to
both such fine and imprisonment.
434. Where any person or persons trade or carry on business under any name
Penalty
for or title of which " Limited" or any contraction or imitation of that word, is the
improper last word, that person or those persons shall, unless duly incorporated with
use of limited liability, be guilty of an offence and shall be liable to a fine not
word
exceeding five hundred rupees for every day upon which the name or title has
"Limited"
. been used.
GENERAL PROVISIONS AS TO OFFENCES

435. (1) Where by any provision in this Act it is provided that a company and
Provision every officer of the company who is in default shall be liable to default fine,
with the company and every such officer shall, for every day during which the
respect to default continues, be liable to a fine not exceeding such amount as is specified
default
fines and in such provision or, where the amount of the fine is not so specified, to a fine
meaning of not exceeding five hundred rupees for every day during which the default
"officer continues.
who is in (2) Where any default, refusal or contravention, for which a company or
default'.
any officer of the company is liable to a default fine is continued after
conviction in respect thereof by a court, then, in addition to any such fine as
may have been imposed by the court at the time of such conviction, the court
may from time to time, upon the production of a certificate to that effect from
the Registrar, impose a further fine under the provisions of subsection (1) for
every day during which the default, refusal or contravention, as the case may
be, is so continued.
(3) For the purpose of any provision in this Act which provides that an
officer of a company who is in default shall be liable to a fine or penalty, the
expression "officer who is in default" means any director, manager, secretary
or other officer of the company, who knowingly and wilfully authorizes or
permits the default, refusal or contravention referred to in that provision.
436. (1) Where any company has made default in complying with any
provision of this Act requiring it to file with, or deliver or send to the Registrar
Compoundi any account, document or return or to give notice to him of any matter, and
ng of certain has by reason of such default committed an offence against this Act, the
offences. Registrar may, if he thinks fit, instead of instituting proceedings in court or,
where such proceedings have already been instituted, instead of continuing
such proceedings against the company or any officer of the
282 Companies Act, No. 17of 1982
company in respect of such offence, accept from the company or such officer
such sum of money as the Registrar may think proper in composition of the
offence; and any sum so accepted shall be credited to the Fund established
under this Act.
(2) Where the Registrar has accepted any sum of money under the provisions
of subsection (1) in composition of any offence, proceedings shall not be
taken against the company or any officer of the company in respect of that
offence, or if already taken, shall not be continued.
(3) Where any sum of money payable in composition of an offence under the
provisions of subsection (1) remains unpaid for a period of one month from
the date fixed for its payment by the Registrar or such extended time as the
Registrar may allow, the Registrar may report the said default in such
payment to a Magistrate and the amount thereof shall be recovered from the
company or any officer of the company in respect of such default in the same
manner as if it were a fme imposed by court, and such court shall direct that
the amount in default be credited to the Fund.
437. All offences under this Act, made punishable—

(a) by a fine only;
Offences (b) by a fine not exceeding twenty thousand rupees with imprisonment of
summarily
triable. either description for a term not exceeding one year ; or
(c) by imprisonment of either description for a term not exceeding one year,
may be tried summarily by a Magistrate.
438. (1) A fine may be imposed by a court for any offence under this Act,
notwithstanding that such fine exceeds the amount of the fine which the court
may impose in the exercise of its ordinary jurisdiction.
Imposition
(2) The court imposing any fine under this Act may direct that the whole or
and applica-
tion of fines. any part thereof shall be applied in or towards payment of the costs of the
proceedings or in or towards rewarding the persons on whose information or
at whose suit the fine is recovered.
439. Nothing in this Act relating to the institution of criminal

proceedings by the Attorney-General shall be taken to preclude any person
from instituting or carrying on any such proceedings.
Savings as
to private
prosecutors
.Savings for 440. Where proceedings are instituted under this against any person by the
privileged Attorney-General, nothing in this Act shall be taken to require any person who
communic-
ations.
has acted as attorney-at-law for the accused to disclose any privileged
communication made to him in that capacity.
SERVICE OF LEGAL PROCESS AND DOCUMENTS
Application and Reference to Court
441. (1) Every application or reference to court under the provisions of
Procedure
this Act unless otherwise expressly provided, or unless the court otherwise
directs, shall be by way of petition and affidavit and every person against
whom such application or reference shall be made shall be named a
respondent in the petition and shall be given notice of the same and be entitled
to object to such application or reference.
(2) Pending the making of a final order in any application or reference
made under the provisions of subsection (1) the court may on the application
of a party to the proceedings make an interim order including a restraining
order which it thinks fit.
(3) Every application or reference made to the court in the course of any
proceedings under the Act, incidental thereto, shall be made by motion and a
memorandum in writing of such motion shall be at the same time delivered to
the court.
(4) The Registrar shall be entitled to be heard or represented in any
application or reference made to the court under this Act at any stage of any
such application or reference.
(5) In all proceedings before court by way of application or reference under
this Act, the costs of the Registrar shall be in the discretion of the court, but
the Registrar shall not be ordered to pay costs of any other of the parties.
Service 442. A document may be served on a company-

of (a) by leaving it at or sending it by post to the registered office of the
documents on
company. company ; or
(b) by delivering it, or sending it by post, to any director secretary,
manager, or other officer of the company ; or
284 Companies Act No.17 of 1982
(c) if for any reason it cannot be served as aforesaid, on such director, secretary, manager or other officer,
by delivering it, or sending it by post it may be served in such manner as may be ordered by the court.
443. Any document purporting to be made or furnished for the purposes of this Act by or on behalf of
Document a company or by any person shall for all purposes be, until the contrary is proved, deemed to have been
s to be made or furnished by such company or person, as the case may be. Any person signing any such
received in
document shall be deemed to be cognizant of all matters therein.
evidence.
444. Where a limited company is plaintiff in any action or other legal proceeding, any judge having
Costs in jurisdiction in the matter may, where it appears by credible testimony that there is reason to believe that
action by the company will be unable to pay the costs of the defendant if successful in his defence, require sufficient
certain
security to be given for those costs, and may stay all proceedings until the security is given.
limited
companies 445. Where an expense or fees payable to the Registrar under this Act are not paid by the person liable
.Recovery to pay the same upon demand, such default may be reported to a Magistrate, and the amount thereof shall
of expenses
and fees. be recovered in the same way as if it were a fine imposed by such Magistrate, who shall direct that the
amount in default be credited to the Fund.
Proceedings in 446. (1) Where an action is instituted against any company by any person in his capacity as a holder
actions byof shares in or debentures of such company, the proceedings in such action shall be taken by way of
shareholder or
debenture summary procedure.
holder against
a company to
be by way of (2) Notwithstanding anything to the contrary in any other written law, the petition presented in court
summary in any action referred to in subsection (1) shall bear a stamp or stamps of the value of fifty rupees.
prccedure.
Power of 447. (1) Where in any proceedings for negligence, default, breach of duty, or breach of trust against
court to grant an officer of a company or a person employed by a company as auditor (whether he is or not an officer of
relief in
certain cases. the company) it appears to the court hearing the case that that officer or person is or may be liable in
respect of the negligence, default.

breach of duty or breach of trust, but that he has acted honestly and reasonably, and that having regard to all
the circumstances of the case, including those connected with his appointment, he ought fairly to be excused
for the negligence, default, breach of duty or breach of trust, that court may relieve him, either wholly or
partly, from his liability on such terms as the court may think fit.
(2) Where any such officer or person referred to in subsection (1) has reason to apprehend that any claim
will or might be made against him, in respect of any negligence, default, breach of duty or breach of trust, he
may apply to the court for relief, and the court on any such application shall have the same power to relieve
him as under this section it would have had if it had been a court before which proceedings against that
person for negligence, default, breach of duty or breach of trust had been brought.
448. (1) The Minister may make regulations for or in respect of all matters which are stated or required by
Regulations.
this Act to be prescribed or for which regulations are required or authorized by this Act to be made.
(2) Every regulation made by the Minister shall be published in the Gazette and shall come into operation on
the date of such publication or on such later date as may be specified in the regulation.
(3) Every regulation made by the Minister shall as soon as convenient after its publication in the Gazette, be
brought before Parliament for approval. Any regulation which is not so approved shall be deemed to be
rescinded as from the date of disapproval but without prejudice to any thing previously done there under.
Notification of the date on which any regulation is so deemed to be rescinded shall be published in the
Gazette.
INTERPRETATION
Interpretation. 449. (1) In this Act, unless the context otherwise requires—
" accounts" includes a company's group accounts, whether prepared in the form of accounts or not;
" agent" does not include a person's lawyer acting as such;
" annual return " means the return required to be made, in the case of a company having a share
capital, under the provisions of section 120, and, in the case of a company not having a share
capital, under the provisions of section 121;
" articles " means articles of association of a company, as originally framed or as altered by special
resolution, including so far as they apply to the company, the regulations contained in Part C
of the Schedule to the Joint Stock Companies Ordinance, 1861, or in Table B in the Schedule
to the Joint Stock Banking Ordinance, 1897, or in Table A in the First Schedule to the
Companies Ordinance, or in Table A in the First Schedule hereto ;
" banking company " means a banking company as defined in section 411;
" book and paper" and "book or paper" include accounts, deeds, writings and documents;
"company" means a company formed and registered under this Act or an existing company ;
"the court" used in relation to a company means the District Court having jurisdiction to wind up
the company; .
"debenture" includes debenture stock, bonds and any other securities of a company whether
constituting a charge on the assets of the company or not;
"director" includes any person occupying the position of director by whatever name called;
"district" means a judicial district as determined by the Minister in charge of the subject of Justice
under section 4 of the Judicature Act, No. 2 of 1978;
"document" includes summons, notice, order, and other legal process, and registers ;
“existing company” means a company formed and registered under the Joint Stock Companies
Ordinance, 1861, or the Joint Stock Banking Ordinance, 1897, or the Companies
Ordinance;
“financial year” means, in relation to any body corporate, the period in respect of which any
profit and loss account of the body corporate laid before it in general meeting is
made up, whether that period is a year or not;
“Fund” means the fund established under section 425;
“issued generally” means, in relation to a prospectus, issued to persons who are not existing
members of the company;
“legal rate” means the rate to be prescribed by regulation under this Act;
“legal representative” means an executor or administrator or in the case of an estate not
administrable in law the next-of-kin who have adiated the inheritance;
“manager” includes any person occupying the position of manager by whatever name called;
“managing agents” means a person, firm or company entitled to the management of the whole
affairs of a company by virtue of an agreement with the company, and under the
control and direction of the directors except to the extent, if any, otherwise provided
for in the agreement, and includes any person, firm or company occupying such
position by whatever name called;
Explanation.—If a person occupying the position of a managing agent calls himself a
manager he shall nevertheless be regarded as managing agent and not as manager
for the purposes of this Act;
“memorandum” means the memorandum of association of a company, as originally framed or
as altered in pursuance of any enactment;
“officer” in relation to a body corporate, includes a director, manager or secretary;
“prescribed” means as respects the provisions of this Act, relating to the winding up of
companies, prescribed by rules, and as respects the other provisions of this Act,
prescribed by regulation;
" prospectus" means any prospectus, notice, circular, advertisement, or other invitation, offering to
the public for subscription to or purchase of any shares or debentures of a company and
includes any such notice, circular, advertisement, or other invitation notwithstanding
that it may contain on the face thereof that it is not a prospectus or offer of shares to the
public ;
" Registrar " means the Registrar of Companies or other officer performing under this Act, the duty
of registration of companies ;
" regulation" means a regulation made by the Minister under this Act; and
"share " means share in the share capital of a company, and includes stock except where a
distinction between stocks and shares is expressed or implied.
(2) A person shall not be deemed to be within the meaning of any provision in this Act a person in
accordance with whose directions or instructions the directors of a company are accustomed to act, by
reason only that the directors of the company act on advice given by him in a professional capacity.
(3) Any reference in this Act to a body corporate or to a corporation should be construed as not including a corporation sole but as in
a company incorporated outside Sri Lanka.
TRANSITIONAL PROVISIONS AND SAVINGS

450. (1) Without prejudice to the provisions of section 5 and 10 of the Interpretation Ordinance—
Transitional
(a) nothing in the repeal of any former written law relating to companies shall affect any order, rule,
provisions.
regulation, scale of fees, appointment, conveyance, mortgage, deed or agreement made, resolution
passed, direction given, proceeding taken, instrument issued or thing done under any former written
law relating to companies, but any such order, rule, regulation, scale of fees, appointment,
conveyance. mortgage, deed, agreement, resolution, direction. proceeding, instrument or thing
shall, if in force on the appointed date, continue m force, and so far as it could have been made,
passed, given, taken, issued or done under this Act, shall have effect as if made. passed, given,
taken, issued, or done wider the provisions of this Act;
(b) any document referring to any former written law relating to companies shall be construed as referring to
the corresponding provision of the provisions of this Act;
(c) any person appointed to any office under or by virtue of any former written law relating to companies
shall be deemed to have been appointed to that office under or by virtue of the provisions of this Act;
(d) any register kept under any former written law relating to companies shall be deemed part of the register
to be kept under the corresponding provisions of this Act;
(e) all funds and accounts constituted under the provisions of this Act, shall be deemed to be in continuation
of the corresponding funds and accounts constituted under the former written law relating to companies.
(2) In this section the expression "former written law relating to companies" means any written law
repealed by the Companies Ordinance or this Act.
451. Nothing in this Act, shall affect—

Savings.
(1) the incorporation of any company registered under any written law repealed by the Companies Ordi-
nance or this Act;
(2) Part C of the Schedule to the Joint Stock Companies Ordinance, 1861, or any part thereof, so far as
the same applies to any company in existence on the appointed date;
(3) Table B in the Schedule to the Joint Stock Bankings Ordinance, 1897, or any part thereof, so far as the
same applies to any company in existence on the appointed date.
(4) Tables A and C in the First Schedule to the Companies Ordinance or any part thereof, so far as the
same applies to any Company in existence on the appointed date.
Savings of452. Subject as hereinafter provided, the provisions of this Act with respect to winding up shall not apply to
pending any company of which the winding up has commenced before the appointed date, but every such company
proceedings
for windingshall be wound
up. 21—A 68752 (02/06)
up in the same manner and with the same incidents as if this Act had not been enacted, and for the purposes
of the winding up the written law under which the winding up commenced shall be deemed to remain in full
force :
Provided, however, that where any such company is being so wound up the court may, on application made
by the Registrar or by any creditor of the company and where the court is of opinion that it is expedient to do
so in the circumstances of the case, make order that any specified provision of this Act with respect to
winding up shall apply to the winding up of such company, and may give such incidental or supplemental
directions as may appear to the court to be necessary for the purposes of the application of such provision ;
and where the court makes any such order any provision of this Act specified in the order shall subject to
any such directions, apply accordingly.
PART XVII
REPEAL
Repeal. 453. The Companies Ordinance (Chapter 145) ip hereby repealed.

FIRST SCHEDULE
(Sections 8, 10, 13, 130, 393, 449)
TABLE A
PART I
RULES FOR MANAGEMENT OF A COMPANY LIMITED BY SHARES, NOT BEING A
PRIVATE COMPANY
Interpretation
1. In these rules—
" the Act" means the Companies Act, 1982 ;
" the seal" means the common seal of the company;
"SECRETARY" MEANS ANY PERSON APPOINTED TO PERFORM THE DUTIES OF THE SECRETARY OF THE COMPANY AND INCLUDES
A COMPANY OR GROUP OF PERSONS ACTING AS SUCH.
Expressions referring to writing shall, unless the contrary intention appears, be construed as including references to printing
lithography, photography and other modes of representing or reproducing word's in a visible form.
Unless the context otherwise requires, words or expressions contained in these rules shall bear the same meaning as in the Act,
or any statutory modification thereof in force at the date at which these rules become binding on t'he company.
Share Capital and Variation of Rights
2. Without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares, and
shares in the company may be issued with such preferred, deferred or other special rights or such restrictions, whether in regard
to dividend, voting, return of capital or otherwise as the company may from, time to time. by ordinary resolution determine.
3. Subject to the provisions of section 57 of the Act, any preference shares may, with the sanction of an ordinary resolution, be
issued on the term that they are, or at the option of the company are liable, to be redeemed on such terms and in such manner as
the company before the issue of the shares may by special resolution determine.
4. Where at any time the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise
provided by the terms of issue of the shares of that class) may, whether or not the company is being wound up, be varied with
the consent in writing of the holders of three-fourths of the issued of that class ; or with the sanction of an extraordinary
resolution passed at a separate general meeting of the holders of the shares of the class. To every such separate general meeting
the provisions
of these rules relating to general meetings shall apply, but so that the necessary quorum shall be two persons at least holding
or representing by proxy one-third of the issued shares of the class and that any holder of shares of the class present in
person or by proxy may demand a poll.
5. The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless
otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue
of further shares ranking in pari passu therewith.
6. The company may exercise the powers of paying commissions conferred by section 54 of the Act, provided the rate per
centum or the amount of the commission paid or agreed to be paid shall be disclosed in the manner required by such section
and the rate of the commission shall not exceed the rate of ten per centum of such price as the case may be. Such
commission may be satisfied by the payment of cash or, the allotment of fully or partly paid shares or partly in one way and
partly in the other. The company may also on any issue of shares pay such brokerage may be lawful.
7. Except as required by law, no person shall be recognized by the company, as holding any share upon any trust, and
the company shall not be bound by or be compelled in any way to recognize (even when having notice thereof) any equitable,
contingent, future or partial interest on any share or any interest in any fractional part of a share (except only as by these
rules or by law otherwise provided) any other rights in respect of any share except an absolute right to the entirety thereof in
the registered holder.
8. Every person whose name is entered as a member in the register of members shall be entitled without payment to
receive within two months after allotment or lodgement of transfer (or within such other period as the conditions of the issue
shall provide) one certificate for all his shares or several certificates each for one or more of his shares upon payment of five
rupees for every certificate after the first or such less sum as the directors shall from time to time determine. Every certificate
shall be under the seal and shall specify the shares to which it relates and the amount paid thereon:
Provided that in respect of a share or shares held jointly by several persons the company shall not be bound to issue
more than one certificate, and delivery of a certificate for a share to one of several joint holders shall be sufficient delivery to
all such holders.
9. Where a share certificate to defaced, lost or destroyed, it may be renewed on payment of a fee of five rupees or such
less sum and on such terms (if any) as to evidence and indemnity and the payment of out-of-pocket expenses of the company
investigating evidence as the directors think fit.
10. The company shall not give, whether directly or indirectly and whether by means of a loan, guarantee, the provision
of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or
to be made by any person of or for any shares in the company or in its holding company nor shall the company make a loan
for any purpose whatever on the security of its shares or those of its holding company, but nothing in this rule shall prohibit
transactions referred to in the proviso to subsection (1) of section 55 of the Act.
Lien
11. The company shall have a first and paramount lien on every share (not being a fully-paid share) for all money
(whether presently payable or not) called or payable at a fixed time in respect of that share, and the company shall also have
a first and paramount lien on all shares (other than fully-paid shares) standing registered in the name of a single person for
all moneys presently payable by him or his estate to the company; but the directors may at any time declare any share to be
wholly or in part exempt from the provisions of this rule. The company’s lien if any, on a share shall extend to all dividends
payable thereon.
12. The company may sell, in such manner as the directors think fit, any shares on which the company has a lien, but no
sale shall be made unless a sum in respect of which the lien exists is presently payable, nor until the expiration of fourteen
days from the date of a notice in writing, stating and demanding payment of such part of the amount in respect of which the
lien exists as is presently payable, has been given to the registered holder for the time being of the share, or the person
entitled thereto by reason of his death bankruptcy or insolvency.
13. To give effect to any such sale the directors may authorize some person to transfer the shares sold to the purchaser
thereof. The purchaser shall be registered as the holder of the shares comprised in any such transfer, and he shall not be
bound to see to the application of the purchase money, nor shall his title to the shares be affected by any irregularity or
invalidity in the proceedings in reference to the sale.
14. The proceeds of the sale shall be received by the company and applied in payment of such part of the amount in
respect of which the lien, exists as is presently payable, and the residue, if any, shall (subject to a like lien for sums not
presently payable as existed upon the shares before the sale) be paid to the person entitled to the shares at the date of the sale.
Calls on shares
15. The directors may from time to time make calls upon the members in respect of any moneys unpaid on their shares
(whether on account of the nominal value of the shares or by way of premium) and not by the conditions of allotment thereof
made payable at fixed times, provided that no call shall exceed one-fourth of the nominal value of the share or be payable at
less than one month from the date fixed for the payment of the last preceeding call, and each member shall (subject to
receiving at least fourteen days’ notice specifying the time or times and place
of payment) pay to the company at the time or times and place so specified the amount called on his shares. A call may be
revoked or postponed as the directors may determine.
16. A call shall be deemed to have been made at the time when the resolution of the directors authorizing the call was passed and
may be.required to be paid by instalments.
17. The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof.
18. Where a sum called in respect of a share is not paid before or on the day appointed for payment thereof, the person from
whom the sum is due shall pay interest on the sum from the day appointed for payment thereof to the time of actual payment at
such rate not exceeding ten per centum per annum as the directors may determine, but the directors shall be at liberty to waive
payment of such interest wholly or in part.
19. Any sum which by the terms of issue of a share becomes payable on allotment or at any fixed date, whether on account of
the nominal value of the share or by way of premium, shall for the purposes of these rules be deemed to be a call duly made and
payable on the date on which by the terms of issue the same becomes payable, and in case of non-payment all the relevant
provisions of these rules as to payment of interest and expenses, forfeiture or otherwise shall apply as if such sum had become
payable by virtue of a call duly made and notified.
20. The directors may, on the issue of shares, differentiate between the holders as to the amount of calls to be paid and the times
of payment.
21. The directors may, if they think fit, receive from any member willing to advance the same, all or any part of the moneys un-
called and unpaid upon any shares held by him, and upon all or any of the moneys so advanced may (until the same would, but
for such advance, become payable) pay interest at such rate not exceeding (unless the company in general meeting shall
otherwise direct) ten per centum per annum, as may be agreed upon between the directors and the member paying such sum in
advance.
Transfer of shares
22. The instrument of transfer of any share shall be executed by or on behalf of the transferor and transferee, and, the transferor
shall be deemed to remain a holder of the share until the name of the transferee is entered in the register of members in respect
thereof,
23. Subject to such restrictions of these rules as may be applicable, any member may transfer all or any of his shares by
instrument in writing in any usual or common form or any other form which the directors may approve.
24. The directors may decline to register the transfer of a share (not being a fully paid up share) to a person of whom they shall
not approve, and they may also decline to register the transfer of a share on which the company has a lien.
25. The directors may also decline to recognize any instrument of transfer unless—
(a) a fee of five rupees or such lesser sum as the directors may from time to time require is paid to the company in respect
thereof;
(b) the instrument of transfer is accompained by the certificate of the shares to which it relates, and such other evidence as the
directors may reasonably require to show the right of the transferor to make the transfer ; and
(c) the instrument of transfer is in respect of only one class of share.
26. Where the directors refuse to register a transfer they shall, within two months from the date on which the transfer was lodged
with the company, send to the transferee notice of the refusal.
27. The registration of transfers may be suspended at such time and for such periods as the directors may from time to time
determine, provided always that such. registrations shall not be suspended for more than thirty days in any year.
28. The company shall be entitled to charge a fee not exceeding five rupees on the registration of every probate, letters of
administration, certificate of death or marriage, power of attorney or other instrument.
Transmission of Shares
29. In case of the death of a member the survivor or survivors where the deceased was a joint holder, and the legal represen-
tative of the deceased where he was a sole holder, shall be the only persons recognized by the company as having any title to his
interest in the shares ; but nothing herein contained shall release the estate of a deceased joint holder from any liability in respect
of any share which had been jointly held by him with other persons.
30. There shall be no restriction by way of limitation of number in regard to the persons to be registered as joint holders of a
share where such persons are executors or trustees of deceased holder.
31. Any person becoming entitled to a share in consequence of the death, bankruptcy or insolvency of a member may, upon
such evidence being produced as may from time to time properly be required by the directors and subject as hereinafter
provided, elect either to be registered himself as holder of the share or to have some person nominated by him registered as the
transferee thereof, but the directors shall, in either case have the same right to decline or suspend registration as they would have
had in the case of a transfer of the share by that member before his death, bankruptcy, or insolvency, as the case may be.
Companies Act, No.17 of 1982
32. Where the persons so becoming entitled elects to be registered himself, he shall deliver or send to the company a notice in
writing signed by him stating that he so elects. Where he elects to have another person registered he shall testify his election by
executing to that person a transfer of the shares. All the limitations restrictions and provisions of these rules relating to the right
to transfer and the registration of the transfer of shares shall be applicable to any such notice or transfer as aforesaid as if the
death, bankruptcy or insolvency of the member had not occurred and the notice of transfer were a transfer signed by the
member.
33. A person becoming entitled to a share by reason of the death, bankruptcy or insolvency of the holder shall be entitled to the same
dividends and other advantages to which he would be entitled if he were the registered holder of the share, except that he shall not,
before being registered as a member in respect of the share, be entitled in respect of it to exercise any right conferred by membership
in relation to meetings of the company:
Provided always that the directors may at any time give notice requiring any such person to elect either to be registered himself or to
transfer the share, and where the notice is not complied with within ninety days the directors may thereafter withold payment of all
dividends, bonuses or other moneys payable in respect of the share until the requirements of the notice have been complied with.
Forfeiture of Shares
34. Where a member fails to pay any call or instalment of a call on the day appointed for payment thereof, the directors may, at any
time thereafter during such time as any part of the call or instalment remains unpaid, serve a notice on him requiring payment of so
much of the call or instalment as is unpaid, together with any interest which may have accrued.
35. The notice shall name a further day (not earlier than the expiration of fourteen days from the date of service of the notice) on
or before which the payment required by the notice is to be made, and shall state that in the event of non-payment at or before the
time appointed the shares in respect of which the call was made will be liable to be forfeited.
36. Where the requirements of any such notice as aforesaid are not complied with, any share in respect of which the notice has
been given may at any time thereafter, before the payment required by the notice has been made, be forfeited by a resolution of the
directors to that effect.
37. A forfeited share may be sold or otherwise disposed of on such terms and in such manner as the directors think fit, and at any
time before a sale or disposition, the forfeiture may be cancelled on such terms as the directors think fit.
38. A person whose shares have been forfeited shall cease to be a member in respect of the forfeited shares, but shall, notwith-
standing remain liable to pay to the company all moneys which, at the date of forfeiture, were payable by him to the company in
297 Companies Act, No. 17, of 1982
respect of the shares, but his liability shall cease if and when the company shall have received payment in full of all such moneys in
respect of the shares.
39. A statutory declaration in writing that the declarant is a director or the secretary of the company, and that a share in the company
has been duly forfeited on a date stated in the declaration, shall be conclusive evidence of the facts therein stated as against all
persons claiming to be entitled to the share. The company may receive the consideration, if any given for the share in any sale or
disposition thereof and may execute a transfer of the share in favour of the person to whom the share is sold or disposed of and he
shall thereupon be registered as the holder of the share, and shall not be bound to see to the application of the purchase money, if
any, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale
or disposal of the share.
40. The provisions of these rules as to forfeiture shall apply in the case of non-payment of any sum which, by the terms of issue of a
share, becomes payable at a fixed time whether on account of the nominal value of the share or by way of premium, as if the same
had been payable by virtue of a call duly made and notified.
Conversion of Shares into Stock
41. The company may by ordinary resolution convert any paid-up shares into stock, and reconvert any stock into paid-up shares of
any denomination.
42. The holders of stock may transfer the same, or any part thereof, in the same manner and subject to the same rules as and subject
to which the shares from which the stock arose might previously to conversion have been transferred, or as near thereto as
circumstances permit; and the directors may from time to time fix the minimum amount of stock transferable but so that such
minimum shall not exceed the nominal amount of the shares from which the stock arose.
43. The holder of stock shall, according to the amount of stock held by them, have the same rights, privileges and advantages as
regards dividends, voting at meetings of the company and other matters as if they held the shares from which the stock arose, but no
such privilege or advantage, (except participation in the dividends and profits of the company and in the assets on winding up) shall
be conferred by an amount of stock which would not, a existing in shares, have conferred that privilege or advantage.
44. Such of the rules of the company as are applicable to paid-up shares shall apply to stock and the words "share" and "shareholder"
therein shall include "stock" and "stockholder".
Alteration of Capital
45. The company may from time to time by ordinary resolution increase the share capital by such sum, to be divided into shares of
such amount, as the resolution shall prescribe.
46. The company may by ordinary resolution-—
(a) consolidate and divide all or any of its share capital into-shares of larger amount than its existing shares ;
(b) sub-divide its existing shares, or any of them, into shares of smaller amount than is fixed by the memorandum of association
subject, nevertheless, to the provisions of paragraph (d) of subsection (1) of section 62 of the Act;
(c) cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person.
47. The company may by special resolution reduce its share any capital redemption reserve fund or any share premium account in
any manner and with, and subject to, any incident authorized, and consent required by law.
General Meetings
48. The company shall in each year hold a general meeting as its annual general meeting in addition to any other meetings in that
year, and shall specify the meeting as such in the notices calling it; and not more than fifteen months shall elapse between the date of
one annual general meeting of the company and that of the next:
Provided that, so long as the company holds its first annual general meetings within eighteen months of its incorporation, it need not
hold it in the year of its incorporation or in the following year. The annual general meeting shall be held at such time and place as
the directors shall appoint.
49. All general meetings other than annual general meetings shall be called extraordinary general meetings.
50. The directors may, whenever they think fit, convene an extraordinary general meeting and extraordinary general meetings shall
also be convened on such requisition, or, in default, may be convened by such requisitionists, as provided by section 128 of the Act.
Where at any time there are not within Sri Lanka sufficient directors capable of acting to form a quorum, any director or any two
members of the company may convene an extraordinary general meeting in the same manner as nearly as possible as that in which
meetings may be convened by the directors.
Notice of General Meetings

51. An annual general meeting and a meeting called for the passing of a special resolution shall be called by twenty-one days' notice
in writing at the least, and a meeting of the company other than an annual general meeting or a meeting for the passing of a
Special resolution shall be called by fourteen days' notice in writing at the least. The notice shall be exclusive of the day on which it
is served or deemed to be served and of the day (or which it is given, and shall specify the place, the day and the hour of meeting
and, in case of special business, the general nature of that business, shall be given in manner hereinafter mentioned or in such other
manner, if any, as may be prescribed by the company in general meeting to such persons as are, under the rules of the company,
entitled to receive such notices from the company:
Provided that a meeting of the company shall, notwithstanding that it is called by shorter notice than that specified in this rule, be
deemed to have been duly called if it is so agreed—
(a) in the case of a meeting called as the annual general meeting, by all the members entitled to attend and vote thereat; and
(b) in the case of any other meeting, by a majority in number of the members having a right to attend and vote at the meeting, being
a majority together holding not less than ninety-five per centum in nominal value of the shares giving that right.
52. The accidental omission to give notice of a meeting to, or the non-receipt of notice of a meeting by, any person entitled to
receive notice shall not invalidate the proceedings at that meeting.
Proceedings at General Meetings

53. All business shall be deemed special that is transacted at an extraordinary general meeting and also that is transacted at an annual
general meeting, with the exception of declaring a dividend, the consideration of the accounts, balance sheets, and the reports of the
directors and auditors, the election of directors in the place of those retiring and the appointment of, and the fixing of the
remuneration of, the auditors.
54. No business shall be transacted at any general meeting unless a quorum of members is present at the time when the meeting
proceeds to business ; save as herein otherwise provided, three members present in person shall be a quorum;
55. Where within half an hour from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the
requisition of members, shall be dissolved ; in any other case it shall stand adjourned to the same day in the next week, at the same
time and place or to such other day and at such other time and place as the directors may determine, and where at the adjourned
meeting a quorum is not present within half an hour from the time appointed for the meeting the members present shall be a quorum.
56. The chairman, if any, of the board of directors shall preside as chairman at every general meeting of the company, or where there
is no such chairman, or where he is not be present within fifteen minutes after the time appointed for the holding of the meeting or is
unwilling to act the directors present shall elect one of their number to be chairman of the meeting.
57. Where at any meeting no director is willing to act as chairman or where no director is present within fifteen minutes after the
time appointed for holding the meeting, the members present shall choose one of their number to be chairman of the meeting.
58. The chairman may, with the consent of any meeting at which a quorum is present (and shall if so directed by the meeting),
adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other
than the business left unfinished at the meeting from which the adjournment took place. When a meeting is adjourned for thirty days
or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid it shall not be
necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting.
59. At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or
on the declaration of the result of the show of hands) demanded—
(a) by the chairman ; or
(b) by at least three members present in person or by proxy; or
(c) by any member or members present in person or by proxy and representing not less than one-tenth of the total voting rights of all
the members having the right to vote at the meeting ; or
(d) by a member or members holding shares in the company conferring a right to vote at the meeting being shares on which an
aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right,
unless a poll be so demanded a declaration by the chairman that a resolution has on a show of hands been carried or carried unani-
mously, or by a particular majority, or lost and an entry to that effect in the book containing the minutes of the proceedings of the
company shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or
against such resolution.
The demand for a poll may be withdrawn.
60. Except as provided in rule 62, where a poll is duly demanded it shall be taken in such manner as the chairman directs, and the
result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded.
61. In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of
hands takes place or at which the poll is demanded shall be entitled to a second or casting vote.
62. A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith. A poll demanded on
any other question shall be taken at such time as the chairman of the meeting directs and any business other than that upon which a
poll has been demanded may be proceeded with pending the taking of the poll.
Votes of Members
63. Subject to any rights or restrictions for the time being attached to any class or classes of shares, on a show of hands every mem-
ber present in person shall have one vote, and on a poll every member shall have one vote for each share of which, he is the holder.
64. In the case of joint holders the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the
exclusion of the votes of the other joint holders ; and for this purpose seniority shall be determined by the order in which the names
stand in the register of members.
65. A member of unsound mind or mentally deficient or in respect of whom an order has been made by any court having jurisdiction
in cases relating to persons of unsound mind or mentally deficient persons may vote, whether on a show of hands or on a poll, by his
manager or curator or other person in the nature of a manager or curator appointed by the court, and any such manager or curator or
other person may, on a poll, vote by proxy.
66. No member shall be entitled to vote at any general meeting unless all calls or other sums presently payable by him in respect of
shares in the company have been paid.
67. No objection shall be raised to the qualification of any voter except at the meeting or adjourned meeting at which the vote
objected to is given or tendered, and every vote not disallowed at such meeting shall be valid for all purposes. Any such objection
made in due time shall be referred to the chairman of the meeting, whose decision shall be final and conclusive,
68. On poll votes may be given either personally or by proxy.
69. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorized in
writing, or where the appointor is a corporation, either under seal, or under the hand of an officer or attorney duly authorized. A
proxy need not be a member of the company.
70. The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notarially
certified copy of that power or authority shall be deposited at the registered office of the company or at such other place within Sri
Lanka as is specified for that purpose in the notice convening the meeting not less than forty-eight hours before the time for holding
the meeting or adjourned meeting at which the person named in
the instrument proposes to vote, or in the case of a poll, not less than twenty-four hours before the time appointed for the taking of
the poll, and in default the instrument of proxy shall not be treated as valid.
71. An instrument appointing a proxy shall be in the following form or a form as near thereto as circumstances permit—
“…………………………..Limited.”
I/We ................……………………………….... of .......…………………………….............. being a
member/members of the above-named company hereby appoint .............. of .............. or failing him.............. of ............... as my/our
proxy to vote for me/us on my/our behalf at the (annual or extraordinary, as the case may be) general meeting of the company to be
held on the ................ day of ........…...…. 19 ........ and at any adjournment thereof.
Signed this .................. day of ............ 19 ......”
72. Where it is desired to afford members an opportunity of voting for or against a resolution and/or to speak at the meeting the
instrument appointing a proxy shall be in the following form or a form as near thereto as circumstances permit—
“…………………………..Limited.
I/We ...................... of ...................... being a member/members of the above-named company, hereby appoint .......................
of ........................ or failing him .................... of ..................... as my/our proxy to vote for me/us on my/our behalf *for/or *against
the resolution and/or *to speak at the (annual or extraordinary, as the case may be) general meeting of the company, to be held on
the ….........day of ................. 19 ...... and at any adjournment thereof.
Signed this .............. day of ............ 19......."
(Note.—*Strike out whichever is not desired. Unless otherwise instructed the proxy will vote as he thinks fit.)
73. The instrument, appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll.
74. A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity
of the principal or revocation of the proxy or of the authority under which the proxy was executed, or the transfer of the share in
respect of which the proxy is given, provided that no intimation in writing of such death, insanity, revocation or transfer as aforesaid
shall have been received by the company at the office before the commencement of the meeting or adjourned meeting at which the
proxy is used.
Corporations Acting by Representatives at Meetings

75. Any corporation which is a member of the company may by resolution of its directors or other governing body authorize such
person as it thinks fit to act as its representative at any meeting of the company or of any class of members of the company, and the
person so authorized shall be entitled to exercise the same powers on behalf of the corporation which he represents as that
corporation could exercise if it were an individual member of the company.
Directors
76. The number of the directors and the names of the first directors shall be determined in writing by the subscribers of the memo-
randum of association or a majority of them.
77. The remuneration of the directors shall from time to time be determined by the company in general meeting. Such remunera-
tion shall be deemed to accrue from day to day. The directors may also be paid all travelling, hotel and other expenses properly
incurred by them in attending and returning from meetings of the directors or any committee of the directors or general meetings of
the company or in connection with the business of the company.
78. The share holding qualification for Directors may be fixed by the company in general meeting and unless and until so fixed no
qualification shall be required.
79. A director of the company may be or become a director or other officer of, or otherwise interested, in any company, promoted
by the company or in which the company may be interested as shareholder or otherwise, and no such director shall be accountable to
the company for any remuneration or other benefits received by him as a director or officer of, or from his interest in, such other
company unless the company otherwise directs.
Borrowing Powers
80. The directors may exercise all the powers of the company to borrow money, and to mortgage or charge its undertaking, property
and uncalled capital, or any part thereof, and to issue debentures, debenture stock and other securities whether outright or as security
for any debt, liability or obligation of the company or any third party:
Provided that the amount for the time being remaining undischarged of moneys borrowed or secured by the directors as aforesaid
(apart from temporary loans obtained from the. company's bankers in the ordinary course of business) shall not at anytime, without
the previous sanction of the company in general meeting, exceed a reasonable amount which if measured by reference to share
capital shall be related to the issued and paid-up share capital of the company, but nevertheless no lender or other person dealing
with the company shall be concerned to see or inquire whether this limit is observed. No debt incurred or security given in excess of
such limit shall be invalid or ineffectual except in the case of express notice to the lender or the recipient of the security at the time
when the debt was incurred or security given that the limit hereby imposed has been or was thereby exceeded.
Powers and Duties of Directors

81. The business of the company shall be managed by the directors, who may pay all expenses incurred in promoting and registering
the company, and may exercise all such powers of' the company as are not, by the Act, or by these rules, required to be exercised by
the company in general meeting, subject, nevertheless, to any of these rules, to the provisions of the Act and to such rules being not
inconsistent with the aforesaid rules or provisions, as may be prescribed by the company at a general meeting ; but no rule made by
the company in general meeting shall invalidate any prior act of the director which, would have been valid if that rule had not been
made.
82. The directors may from time to time and at any time by power of attorney appoint any company, firm or person or body of
persons, whether nominated directly or indirectly by the directors to be the attorney or attorneys of the company for such purposes
and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the directors under these rules)
and for such period and subject to such conditions as they may think fit, and any such power of attorney may contain such
provisions for the protection and convenience of persons dealing with any such attorney as the directors may think fit and may also
authorize any such attorney to delegate all or any of the powers, authorities and discretions vested in him.
83. The company may exercise the powers conferred by section 37 of the Act with regard to having an official seal for use abroad
and such powers shall be vested in the directors.
84. The company may exercise the powers conferred by sections 116 to 119 (both inclusive) of the Act, with regard to the keeping
of a branch register, and the directors may (subject to the provisions of those sections) make and vary such rules as they may think
fit respecting the keeping of any such. register.
85. (1) A director who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the company
shall declare the nature of his interest at a meeting of the directors in accordance with the provisions of section 203 of the Act.
.
(2) A director shall not vote in respect of any contract or arrangement in which he is interested, and if he shall do so his vote shall
not be counted, nor shall he be counted in the quorum present at the meeting, but neither of these prohibitions shall apply to—
(a) any arrangement for giving any director any security or indemnity in respect of money lent by him to or obligations undertaken
by him for the benefit of the company ; or
(b) to any arrangement for the giving by the company of any security to a third party in respect of a debt or obligation of the
company for which the director himself has assumed responsibility in whole or in part under a guarantee or indemnity or by
the deposit of a security; or
(c) any contract by a director to subscribe for or under-write shares or debentures of the company; or
(d) any contract or arrangement with any other company in which he is interested only as an officer of the company or as holder
of shares or other securities and these prohibitions may at any time be suspended or relaxed to any extent, and either generally or
in respect of any particular contract, arrangement or transaction; by the company at a general meeting.
(3) A director may hold any other office or place of profit under the company (other than the office of auditor) in conjunction with
his office of director for such period and on such terms (as to remuneration and otherwise) as the directors may determine and no
director or proposed director shall be disqualified by his office from contracting with the company either with regard to his tenure of
any such other office or place of profit or as vendor, purchaser or otherwise, nor shall any such contract, or any contract or
arrangement entered into by or on behalf of the company in which any director is in any way interested, be liable to be avoided, nor
shall any director so contracting or being so interested be liable to account to the company for any profit realized by any such
contract or arrangement by reason of such director holding that office or of the fiduciary relation thereby established.
(4) A director, notwithstanding his interest, may be counted in the quorum present at any meeting whereat he or any other director is
appointed to hold any such office or place of profit under the company or whereat the terms of any such appointment are arranged
and he may vote on any such appointment or arrangement other than his own appointment or the arrangement of the terms thereof.
(5) Any director may act by himself or his firm in a professional capacity for the company and he or his firm shall be entitled to
remuneration for professional services as if he were not a director provided that nothing herein contained shall authorize a director
or his firm to act as auditor to the company.
86. All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments, and all receipts for moneys, paid to the
company shall be signed, drawn, accepted, endorsed, or otherwise executed, as the case may be, in such manner as the directors shall
from time to time by resolution determine.
87. The directors shall cause minute to be made in books provided for the purpose—
(a) of all appointments, of officers made by the directors;
(b) of the names of the directors present at each meeting of the directors and of any committee of the directors;
(c) of all resolution and proceedings at all meetings of the company, and of the directors, and of committees of directors,
and every director present at any meeting of directors of committee of directors shall sign his name in a book to be kept for that
purpose.
88. The directors on behalf of the company may pay a gratuity or pension or allowance on retirement to any director who has held
any other salaried office or place of profit with the company or to his widow or dependants and may make contributions to any fund
and pay premiums for the purchase or provision of any such gratuity, pension or allowance.
Disqualifications of Directors
89. The office of director shall be vacated if the director—
(a) ceases to be a director by virtue of the provisions of section 180 or 181 of the Act ; or
(b) becomes bankrupt or insolvent or makes any arrangement or composition with his creditors generally ; or
(c) becomes prohibited from being a director by reason of any order made under the provisions of section, 186 of the Act;
or
(d) becomes of unsound mind or mentally deficient; or
(e) resigns his office by notice in writing to the company; or
(f) shall for more than six months have been absent without permission of the directors from meetings of the directors held
during that period.
Rotation of Directors
90. At the .first annual general meeting of the company all the directors shall retire from office and at the annual general meeting in
every subsequent year one-third of the directors for the time being, or, if their number is not three or a multiple of three, then the
number nearest one-third shall retire from office.
91. The directors to retire in every year shall be those who have been longest in office since their last election, but as between
persons who became directors on the same day those to retire shall (unless they otherwise agree among themselves) be determined
by lot.
92. A retiring director shall be eligible for re-election.
93. The company at the meeting at which a director retires in manner aforesaid may fill the vacated office by electing a person
thereto, and in default the retiring director shall if offering himself for re-election be deemed to have been re-elected, unless at such
meeting it is expressly resolved not to fill such vacated office or unless a resolution for the re-election of such director shall have
been put to the meeting and lost.
94. No person other than a director retiring at the meeting shall unless recommended by the directors be eligible for election to the
office of director at any general meeting unless not less than three nor more than twenty-one days before the date appointed for the
meeting there shall have been left at the registered office of the company notice in writing signed by a member duly qualified to
attend and vote at the meeting for which such notice is given,
of his intention to propose such person for election, and also notice in writing signed by that person of his willingness to be elected.
95. The company may from time to time by ordinary resolution increase or reduce the number of directors, and may also determine
in what rotation the increased or reduced number is to retire from office.
96. The directors shall have power at any time, and from time to time, to appoint any person to be a director, either to fill a casual
vacancy or as an addition to the existing directors, but so that the total number of directors shall not at any time exceed the number
fixed in accordance with these rules. Any director so appointed shall hold office only until the next following annual general
meeting, and shall then be eligible for re-election but shall not be taken into account in determining the directors who are to retire by
rotation at such meeting.
97. The company may by ordinary resolution, of which special notice has been given in accordance with section 138 of the Act,
remove any director before the expiration of his period of office notwithstanding anything in these regulations or in any agreement
between the company and such director. Such removal shall be without prejudice to any claim such director may have for damagea
for breach of any contract of service between him and the company.
98. The company may by ordinary resolution appoint another person in place of a director removed from office under the provisions
of rule 97 and without prejudice to the powers of the directors under the provisions of rule 96, the company in general meeting may
appoint any person to be a director either to fill a casual vacancy or as an additional director. A person appointed in place of a
director so removed or to fill such a vacancy shall be subject to retirement at the same time as if he had become a director on the day
on which the director in whose place he is appointed was last elected a director.
Proceeding of Directors
99. The directors may meet together for the despatch of business, adjourn, and otherwise regulate their meetings, as they think fit.
Questions arising at any meetings shall be decided by a majority of votes. In case of an equality of votes, the chairman shall have a
second or casting vote. A director may, and the secretary on the requisition of a director shall, at any time summon a meeting of the
directors. It shall not be necessary to give notice of a meeting of directors to any director for the time being absent from Sri Lanka.
100. (a) The quorum necessary for the transaction of the business of the directors may be fixed by the directors, and unless so fixed
shall be two.
(b) The continuing directors may act notwithstanding any vacancy in their body but, if and so long as their number is reduced below
the number fixed by or pursuant to the rules of the company as the necessary quorum of directors, the continuing directors or
director may act for the purpose of increasing the number of directors to that number, or of summoning a general meeting of the
company, but for no other purpose.
308 Companies Act, No. l7 of 1982
101. The directors may elect a chairman of their meetings and determine the period for which he is to hold office; but where no
such chairman is elected or where at any meeting the chairman is not present within five minutes after the time appointed for
holding the same, the directors present may choose one of their number to be chairman of the meeting.
102. The directors may delegate any of their powers to committees consisting of such member or members of their body as they
think fit; any committee so formed shall in the exercise of the powers so delegated, conform to any rules that may be imposed on it
by the directors.
103. A committee may elect a chairman of the meeting, if no such chairman is elected or if at any meeting the chairman is not
present within five minutes after the time appointed for holding the same, the members present may choose one of their number to
be chairman of the meeting.
104. A committee may meet and adjourn as it thinks proper. Questions arising at any meeting shall be determined by a majority
of votes of the members present, and in the case of an equality of votes the chairman shall have a second or casting vote.
105. All acts done by any meeting of the directors or of a committee of directors or by any person acting as a director shall.
notwithstanding that it be afterwards discovered that there was some defect in the appointment of any such director or person acting
as aforesaid or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and was
qualified to be a director.
106. A resolution in writing, signed by all the directors for the time being entitled to receive notice of a meeting of the directors shall
be as valid and effectual as if it had been passed at a meeting of the directors duly convened and held.
Managing Director
107. The directors may from time to time appoint one or more of their body to the office of managing director for such period and
on such terms as they think fit, and, subject to the terms of any agreement entered into in any particular case, may revoke such
appointment. A director so appointed shall not, whilst holding that office, be subject to retirement by rotation or be taken into
account in determinating the rotation of retirement of directors, but his appointment shall be automatically determined if he cease
from any cause to be a director.
108. A managing director shall receive such remuneration (whether by way of salary commission or participation in profits, or partly
in one way and partly in another) as the directors may determine.
109. The directors may entrust to and confer upon a managing director any of the powers exercisable by them upon such terms and
conditions and with such restrictions as they may think fit, and either collaterally with or to the exclusion of their own powers and
may from time to time revoke, withdraw, alter or vary all or any of such powers.
Secretary
110. The secretary shall be appointed by the directors for such term, at such remuneration and upon such conditions as they may
think fit, and any secretary .so appointed may be removed by them.
111. No person shall be appointed or hold office as secretary who is—
(a) the sole director of the company ; or
(b) a corporation the sole director of which is the sole director of the company; or
(c) the sole director of a corporation which is the sole director of the company.
112. A provision of the Act or these rules requiring or authorizing a thing to be done by or to a director and the secretary shall not
be satisfied by its being done by or to the same person acting both as director and as, or in place of, the secretary.
The Seal
113. The directors shall provide for the safe custody of the seal, which shall only be used by the authority of the directors or of a
committee of the directors authorized by the directors in that behalf, and every instrument to which the seal shall be affixed shall be
signed by a director and shall be countersigned by the secretary or by a second director or by some other person appointed by the
directors for the purpose.
Dividends and Reserves

114. The company at a general meeting may declare dividend but no dividend shall exceed the amount recommended by the
directors.
115. The directors may from time to time pay to the members such interim dividends as appear to the directors to be justified by the
profits of the company.
116. No dividend shall be paid otherwise than out of profits.
117. The directors may, before recommending any dividend, set aside out of the profits of the company such sums as they think
proper as a reserve or reserves which shall, at the discretion of the directors, be applicable for any purpose to which the profits of the
company may be properly applied, and pending such application may, at the like discretion, either be employed in the business of
the company or be invested in such investments (other than shares
of the company) as the directors may from time to time think fit. The directors may also without placing the same to reserve
carry forward any profits which they may think prudent not to divide.
118. Subject to the rights of persons, if any, entitled to shares with special rights as to dividends, all dividends shall be declared
and paid according to the amounts paid or credited as paid on the shares in respect whereof the dividend is paid, but no amount
paid or credited as paid on a share, in advance of calls shall be treated for the purposes of this rules as paid on the share. All
dividends shall be apportioned and paid proportionately to the amounts paid or credited as paid on the shares, during any portion
or portions of the period in respect of which the dividend is paid ; but where any share is issued on terms providing that it shall
rank for dividend as from a particular date such share shall rank for dividend accordingly.
119. The directors may deduct from any dividend payable to any member all sums of money (if any) presently payable by him to
the company on account of calls or otherwise in relation to the shares of the company.
120. Any general meeting declaring a dividend or bonus may direct payment of such dividend or bonus wholly or partly by the
distribution of specific assets and in particular of paid-up shares, debentures or debenture stock of any other company or in any
one or more of such ways, the directors shall give effect to such resolution, and where any difficulty arises in regard to such
distribution, the directors may settle the same as they think expedient, and in particular may issue fractional certificates and fix the
value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any mem-
bers upon the footing of the value so fixed in order to adjust the rights of all parties, and may vest any such specific assets in
trustees as may seem expedient to the directors.
121. Any dividend, interest or other moneys payable in cash in respect of shares may be paid by cheque or warrant sent through
the post directed to the registered address of the holder or, in the case of joint holders to the registered address of that one of the
joint holders who is first named on the register of members or to such person and to such address as the holder or joint holders
may in writing direct. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent. Any one
of two or more joint holders may give effectual receipts for any dividends, bonuses or other moneys payable in respect of the share
held by them as joint holders.
122. No dividend shall bear interest against the company.
123. There shall be no forfeiture of unclaimed dividends before the expiration of six years after the declaration thereof.
Accounts
124. The directors shall cause proper books of accounts to be kept with respect to—
(a) all sums of money received and, expended by the company and the matters in respect of which the receipt and
expenditure takes place
(b) all sales and purchases of goods by the company; and
(c) the assets and liabilities of the company.
Proper books shall not be deemed to be kept if there are not kept such books of account as are necessary to give a true
and fair view of the state of the company's affairs and to explain its transactions.
125. The books of account shall be kept at the registered office of the company, or, subject to the provisions of subsection
(3) of section 143 of the Act, at such other -place or places as the directors think fit, and shall always be open to the
inspection of the directors.
126. The directors shall, from time to time, determine whether and to what extent and at what times and places and under
what conditions or regulations the accounts and books of the company or any of them shall foe open to the inspection of
members not being directors, and no member (not being a director) shall have any right of inspecting any account or
book or document of the company except as conferred by statute or authorized by the "directors or by the company in
general meeting.
127. The directors shall from time to time, in accordance with the provisions of sections 144, 146 and 152 of the Act, cause
to be prepared and to be laid before the company in general meeting such profit and loss accounts, balance sheets,
group accounts (if any) and reports as are referred to in those sections.
128. A copy of every balance sheet (including every document required by law to be annexed thereto) which is to be laid
before the company in general meeting, together with a copy of the auditor's report, shall not less than twenty-one days
before the date of the meeting be sent to every member of, and every holder of debentures of the company, and to every
person registered under the provisions of rule 32 :
Provided that this rule shall not require a copy of these documents to be sent to any person of whose address the
company is not aware or to more than one of the joint holders of any shares or debentures.
Capitalisation of profits
129. The company in general meeting may, upon the recommendation of the directors, resolve that it is desirable to
capitalize any part of the amount for the time being standing to the credit of any of the company's reserve accounts or to
the credit of the profit and loss account or otherwise available for distribution and accordingly that such sum be set free
for distribution amongst the members who would have been entitled thereto if distributed
by way of dividend and in the same proportions on condition that the same be not paid in cash but be applied either in
or towards paying up any amounts for the time being unpaid on any shares held by such members respectively or
paying up in full unissued shares or debentures of the company to be allotted and distributed credited as fully paid up to
an amongst such members in the proportion aforesaid, or partly in the one way and partly in the other, and the directors
shall give effect to such resolution :
Provided that, a share premium account and a Capital Redemption Reserve Fund may, for the purposes of this rule, only
be applied in the paying up of unissued shares to be issued to members of the company as fully paid bonus shares.
130. Whenever such a resolution as aforesaid shall have been passed the directors shall make all appropriations and
applications of the undivided profits resolved to be capitalised thereby; and all allotment and issues of fully-paid shares
or debentures, if any, and generally shall do all acts and things required to give effect thereto, with full power to the
directors to make such provision by the issue of fractional certificates or by payment in cash 01 otherwise as they think
fit for the case of shares or debentures becoming distributable in fractions, and also to authorize any person to enter on
behalf of all members entitled thereto into an agreement with the company providing for the allotment to them
respectively, credited as fully paid up, of any further shares or debentures to which they may be entitled upon such
capitalisation, or (as the case may require) for the payment up by the company on their behalf, by the application
thereto of their respective proportions of the profits resolved to be capitalised, of the amounts or any part of the amounts
remaining unpaid on their existing shares, and any agreement made under such authority shall be effective and binding
on all such members-
Audit
131. Auditors shall be appointed and their duties regulated in accordance with the provisions of sections 156 to 159 of the
Act.
Notices
132. A notice may be given by the company to any member either personally or by sending it by post to him or to his regis-
tered address or (if he has no registered address within Sri Lanka) to the address, if any, within Sri Lanka, supplied by
him to the company for the giving of notice to him. Where a notice is sent by post, service of the notice shall be deemed
to be effected, by properly addressing, prepaying, and posting a letter containing the notice, and to have been effected in
the case of notice of a meeting at the expiration of twenty four hours after the letter containing the same is posted, and
in any other case at the time at which the letter would be delivered, in the ordinary course of post.
133. Notice may be given by advertisement in any leading daily newspaper, in addition to the manner of notice hereinbefore
provided.
134. Notwithstanding the provision of rule 132, any member where registered address is not within Sri Lanka, may name an
address within Sri Lanka which, for purposes of notices shall be considered as his registered address.
135. A notice may be given by the company to the joint holders of a share by giving the notice to the joint holder first named
in the register of members in respect of the share.
136. A notice may be given by the company to the persons entitled to a share in consequence of the death, bankruptcy or
insolvency of a member by sending it through the post in a prepaid letter addressed to them by name, or by the title of
representatives of the deceased, or, trustee of the bankrupt or insolvent, or by any like description, at the address, if any,
within Sri Lanka supplied for the purpose by the persons claiming to be so entitled, or (until such an address has been
so supplied) by giving the notice in any manner in which the same might have been given if the death or bankruptcy
had not occurred.
137. Notice of every general meeting shall be given in any manner herein before authorized to-—
(a) every member except those members who (having no registered address within Sri Lanka) have not supplied to
the company an address within Sri Lanka for the giving of notices to them;
(b) every person upon whom the ownership of a share devolves by reason of his being a legal representative or a
trustee in bankruptcy or insolvency of a member where the member but for his death or bankruptcy would be
entitled to receive notice of the meeting;
(c) the auditor for the time being of the company; and
(d) the Registrar.
No other person shall be entitled to receive notices of general meetings.
Win
138. Where the company shall be wound up the liquidator may, with the sanction of an extraordinary resolution of the
company and any other sanction required by the Act divide amongst the members in specie or kind the whole or any
part of the assets of the company (whether they shall consist of property of the same kind or not) and may, for such
purpose set such value as he deems fair upon any property to be divided as aforesaid and may determine how such
division shall be carried out as between the members or different classes of members. The liquidator may, with the like
sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the contributories as the
liquidator, with the like sanction, shall think fit, but so that no member shall be compelled to accept any shares or other
securities whereon there is any liability.
Indemnity
139. Every director, managing director, agent, auditor, secretary and other officer for the time being of the company shall be
indemnified out of the assets of the company against any liability incurred by him in defending any proceedings,
whether civil or criminal, in which judgment is given in his favour or in which he is acquitted or in connection with any
application under the provisions or section 446 of the Act in which release is granted to him by the court.
RULES FOR THE MANAGEMENT OF A PRIVATE COMPANY LIMITED BY SHARES
1. (1) The rules contained in Part I other than rules 24 and 54 shall apply.
(2) Rule 51 contained in Part I shall apply as if for the twenty-one and " fourteen ", there substituted the words "
fourteen " and " seven " respectively.
2. The company is a private company and, accordingly—
(a) the right to transfer shares is restricted in the manner hereinafter specified ;
(b) the number of members of the company (exclusive of persons who are in the employment of the company and of
persons who having been formerly in the employment of the company were while in such employment and have
continued after the determination of such employment to the members of the company) is limited to fifty.
Provided that where two or more persons hold one or more shares in a company jointly they shall for the purpose
of this rules be treated as single member ;
(c) any invitation to the public to subscribe for any shares or debentures of the company is prohibited,
(d) the company shall not have power to issue share warrants to bearer.
3. The directors may, in their absolute discretion and without assigning any reason therefor, decline to register any transfer
of any share, whether or not it is a fully-paid share.
4. No business shall be transacted at any general meeting unless a quorum of members is present at the time when the
meeting proceeds to business; save as herein otherwise provided two members present in person or by proxy shall be a
quorum.
5. Subject to the provisions of the Act, a resolution in writing signed by all the members for the time being entitled to
receive notice of and to attend and vote at general meetings (or being corporations by their duly authorized
representatives) shall be as valid and effective as if the same had been passed at a general. meeting of the company duly
convened and held.
Note.—Rules 3 and 4 of this Part are alternative to rules 24 and 54 respectively of Part I.
TABLE B (Section 13)

FORM OF MEMORANDUM OF ASSOCIATION OF A COMPANY LIMITED BY SHARES
1st—The name of the company is "The Eastern Steam Packet Company, Limited ".
2nd—The registered office of the company. will situated in the district of Colombo.
3rd—The objects for which the company is established are—
Primary Objects:
(i) The conveyance of passengers and goods in ships or boats between such places as the company may from time
to time determine.
(ii) The purchasing and hiring of steam, sailing, motor and other ships or boats for the purposes of the company.
(iii) The construction and establishment of docks, warehouses; work shops and other conveniences.
Anciliary Objects:
(i) The carrying on of business as hotel, cafe and lodging house keepers.
(ii) The carrying on of business as commission agents customs agents and warehousemen.
Other Objects:
(i) The carrying on of business as manufacturers of, and dealers in rope, nautical instruments, gear, fittings and-
equipment of every description.
(ii) The building, construction and repair of ships and boats and sailing vessels of all types.
(iii) The carrying on of the business of deep-sea fishing, and as importers and exporters of sea foods.
4th - The liability of the members is limited.
5th—The share capital of the company is two hundred thousand rupees divided into one thousand shares of two hundred rupees
each.
We the several persons whose names and address are subscribed, are desirous of being formed into a company, in pursuance of
this memorandum of association and we respectively agree to take the number of shares in the capital of the company set oppo-
site our respective names.
Names, Addresses and Descriptions Number of shares taken

of Subscribers by each Subscriber
1. James Silva of Merchant .. 200

2. Kumara Ratnayake of Attorney-at-law .. 25
3. John Selvanathan of Businessman .. 30
4. Abdul Majeed of Merchant .. 40
5. Mahen Kumarasen of Accountant .. 15
6. Andrew Brown; of Merchant .. 5
7. David Appuhamy of Merchant .. 10
Total shares taken .. 325
Dated the ............ day of ......../... 19.....
Witness to the above signatures and I do hereby testify to the number of shares/subscribed for by the signatories above named.
Notary Public
TABLE C (Section 13)
FORM OF MEIMORANDUM AMD ARTICLES OF ASSOCIATION OF A COMPANY

LIMITED BY GURANTEE AND NOT HAVING A SHARE CAPITAL
Memorandum of Association
1st.—The name of the company is "The Kandy School Association, Limited- "
2nd.—The registered office of the company will be situate in the district of Kandy. "
3rd.—The objects for which the company is established are the Primary Objects:
(ii) The carrying on a school for boys and girls in the district of Kandy
(iii) The holding of lectures, exhibitions, classes and conferences calculated directly or indirectly to advance the
cause of education.
(iu) The establishment of finishing schools, for boys and girls for impacting instruction in art, music and oriental dancing.
Ancillary Objects:
(i) The establishment of funds or trusts and to receive donations, contributions and subscriptions towards pursuance of the
primary objects of the company;
(ii) The establishment and maintenance of hostels, bookshops, reading rooms and places of amusement.
Other Objects :
(i) The carrying pn of business as printers and publishers of newspapers, periodicals and books.
(ii) The carrying on of business as manufacturers of and dealers in stationery and sports materials.
(iii) The carrying on of business as agriculturists and growers of food crops.
4th—The liability of the members is limited.
5th-—Every member of the company undertakes to contribute to the assets of the company in the event of its being wound up
while he is a member or within one year afterwards, for payment of the debts and liabilities of the company contracted before he
ceases to be a member, and the costs, charges and expenses of winding up, and for the adjustment of the rights of the
contributories among themselves, such amount as may be required not exceeding one hundred rupees.
We, the several persons whose names and addresses are subscribed, are desirous of being formed into a company, in pursuance
of this memorandum of association.
Names, Addresses and Descriptions of Subscribers.

1. James Silva of School Master
2. Kumara Ratnayake of School Master
3. John Selvanathan of , School Master
4. Abdul Majeed of , School Master
5. Mahen Kumarasan of , School Master
6. Andrew Brown of , School Master
7. David Appuhamy of School Master
Dated the ............ day of ............ 19.....

Witness to the above signatures.
Notary Public.
ARTICLES OF ASSOCIATION TO A COMPANY PRECEDING MEMORANDUM OF ASSOCIATION

Interpretation
1. In these articles—
" the Act " means the Companies Act, 1882 ;
"the seal" means the common seal of the company:
" secretary " means any person appointed to perform the duties of the secretary of the company;
Expressions referring to writing shall, unless the contrary intention appears, be construed as including references to to
printing lithography, photography, and modes of representing or reproducing words in a visible form.
Unless the context otherwise requires, words or expressions contained in these articles shall bear the same meaning
as in the Act or any statutory modification thereof in force at the date at which these articles become binding on the
company.
Members
2. The number of members with which the company proposes to be registered is 500 but the directors may from time to
time register an increase of members.
3. The subscribers to the memorandum of association and such other persons, as the directors shall admit to membership
shall be members of the company.
General Meetings
4. The company shall in each year hold a general meeting as its annual general meeting in addition to any other meeting in
that year, and shall specify the meeting as such in the notices calling it; and not more than fifteen months shall elapse
between the date of one annual general meeting of the company and that of the next:
Provided that so long as the company holds its first annual general meeting within eighteen months of its incorporation,
it need not hold it in the year of its incorporation or in the following year. The annual general meeting shall be held at
such time and place as the directors shall appoint.
5. All general meetings other than annual general meetings shall be called extraordinary general meetings.
6. The directors may, whenever they think fit, convene an extraordinary general meeting, and extraordinary general
meetings shall also be convened on such requisition, or in default, may be convened by such requisitionists, as provided
by section 128 of the Act, Where at any time there are not within Sri Lanka sufficient directors capable of acting to
form a quorum any director or any two members of the company may convene an extraordinary general meeting in the
same manner as nearly as possible as that in which meetings may be convened by the directors.
Notice of General Meetings.
7. An annual general meeting and a meeting called for the passing of a special resolution shall be called by twenty-one
days' notice in writing at the least in the case of a company other than a private company and fourteen days' notice in
writing at the least in the case of a private company. A meeting other than an annual general meeting or a meeting for
the passing of a special resolution shall be called by fourteen days' notice in writing of least in the case of a company
other than a private company and seven days notice in writing at the least in the case of a private company. The notice
shall be exclusive of the day on which it is served or deemed to be served and of the day for which it is given, and shall
specify the place, the day and the hour of meeting and, in case of special business, the general nature of that business
shall be
cccxix. Companies Act, No.17 of 1982
given in manner hereinafter mentioned or in such other manner if any, as may be prescribed by the company in general
meeting to such persons as are, under the articles of the company entitled to receive such notices from the company
Provided that a meeting at the company shall notwithstanding that it is called by shorter notice than that specified in this
article be deemed to have been duly called if it is so agreed—
(a) in the case of a meeting called as the annual general meeting, by all the members entitled to attend and vote
thereat; and
(b) in the case of any other meeting, by a majority in number of the members having a right to attend and vote at
the meeting, being a majority together representing not less than ninety-five per cent on the total voting rights
at that meeting of all the members.
8. The accidental omission to give notice of a meeting to or the non receipt of notice of a meeting by, any person entitled
to receive notice shall not invalidate the proceedings at that meeting,
Proceedings at General Meetings
9. All business shall be deemed special that it transacted at an extraordinary general meeting, and also all that is transacted
at an annual general meeting, with the exception of declaring a dividend, the consideration of the accounts balance
sheets, and the reports of the directors and auditors, the election of directors in the place of those retiring and the
appointment of, and the fixing of the remuneration of, the auditors.
10. No business shall be transacted at any general meeting unless a quorum of members is present at the time when the
meeting proceeds to business; save as herein otherwise provided, three members present in person shall be a quorum.
11. If within half an hour from the time appointed for the meeting a quorum is not present, the meeting, if convened upon
the requisition of members, shall be dissolved ; in any other case it shall stand adjourned to the same day in the next
week as the same time and place, or to such other day and at such other time and place as the directors may determine,
and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting the
members present shall be a quorum.
12. The chairman, if any, of the board of directors shall preside as chairman at every general meeting of the company, or
where there is no such chairman, or if he shall not be present within fifteen minutes after the time appointed for the
holding of the meeting or is unwilling to act, the direction or a present shall elect one of their number to be chairman of
the meeting.
13. Where at any meeting no director is willing to act as chairman or where no director is present within fifteen minutes
after the time appointed for holding the meeting, the members present shall choose one of their number to be chairman
of the meeting.
14. The chairman may with the consent of any meeting at which a quorum is present (and shall if so directed by the
meeting), adjourn the meeting from time to time and from place to place, but no business shall be transacted at any
adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When
a meeting is adjourned for thirty days or more, notice of the adjourned meeting shall be give as in the case of an original
meeting. Save as aforesaid it shall not be necessary to give any notice of an adjournment or of the business to be
transacted at an adjourned meeting,
15. At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is
(before or on the declaration of the result of the show of hands) demanded—
(a) by the chairman ; or
(b) by at least three members present in person or by proxy; or
(c) by any member or members present in person or by proxy and representing not less than one-tenth of the total
voting rights of all the members having the right to vote at the meeting.
Unless a poll be so demanded a declaration by the chairman that a resolution has on a show of hands been carried or
carried unanimously, or by a particular majority, or lost and an entry to that effect in the book containing the minutes
proceedings of the company shall be conclusive evidence of the fact without proof of the number or proportion of the
votes recorded in favour of or against such resolution.
The demand for a poll may be withdrawn.
16. Except as provided in article 18, if a poll is duly demanded it shall be taken in such manner as the chairman directs, and
the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded.
17. In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the
show of hands takes place or at which the poll is demanded, shall be entitled to a second or casting vote.
18. A poll demanded on the election of a chairman, or on a question of adjournment, shall be taken forthwith. A poll
demanded on any other question shall be taken at such time as the chairman of the meeting directs and any business
other than that upon which a poll has been demanded may be proceeded with pending the taking of the poll.
19. Subject to the provisions of the Act, a resolution in writing signed by all the members for the time being entitled to
receive notice of and to attend and vote at general meetings, (or being corporations by their duly authorized
representatives) shall be as valid and effective as if the same had been passed at a General Meeting of the company duly
convened and held.
Votes of Members
20. Every member shall have one vote.

21. A member of unsound mind or mentally deficient or in respect of whom an order has been made by any court having
jurisdiction in cases relating to persons of unsound mind or mentally deficient may vote, whether on a show of hands or
on a poll, by his manager or curator or other person in the nature of his manager or curator appointed by that court and
any such manager or curator or other person may, on a poll vote by proxy.
22. No member shall be entitled to vote at any general meeting unless all moneys presently payable by him to the company
have been paid.
23. On a poll votes may be given either personally or by proxy.
24. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorized
in writing, or if the appointer is a corporation, either under seal or under the hand of an officer or attorney duly
authorized. A proxy need not be a member of the company.
25. The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a
notarially certified copy of that power or authority shall be deposited at the registered office of the company or at such
other place within Sri Lanka as is specified for that purpose in the notice convening the meeting, not less than forty-
eight hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument
proposes to vote, or in the case of a poll, not less than twenty-four hours before the time appointed for the taking of the
poll, and in default the instrument of proxy shall not be treated as valid.
26. An instrument appointing a proxy shall be in the following form or a form as near thereto as circumstances admit:—
"...............………..... Limited
I/We ............ of ............ being a member/members of the above named company, hereby appoint …………of ..............
or failing him …….... of .............. as my/our proxy to vote for me/us on my/our behalf at the (annual or extraordinary,
as the case may tee) general meeting of the company to be held on the ............ day of .......... 19.. arid at any
adjournment thereof.
Signed this ..........…. day of ............ 19.. "

(Note.—Strike out whichever is not desired. Unless otherwise instructed the proxy will vote as he thinks fit.)
27. Where it is desired to afford members an opportunity of voting for or against a resolution and/or to speak at the meeting
the instrument appointing a proxy shall be in the following form or a form as near thereto as circumstances admit-
"……............. Limited,
23—A 63752 (2/06)
I/We ............... of …………. being a member/members of the above-named company, hereby appoint ...............
of ........... or failing him ..........of......... as my/our proxy to vote for me/us on my/our behalf for/or* against the
resolution and/or to speak at the (annual or extraordinary, as the case may be) general meeting of the company, to
be held on the .......... day of.............. 19…….. and at any adjournment thereof.
Signed this ............ day of ............ 19..."
(Note.—Strike out whichever is not desired. Unless otherwise
instructed the proxy will vote as he thinks, fit.)
28. The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll.
29. A vote given in accordance with the terms of an instrument of
proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or of the
authority under which the proxy was executed provided that no intimation in writing to such death, insanity or
revocation as aforesaid shall have been received by the company at the office before the commencement of the meeting
or adjourned meeting at which the proxy is used.
Corporations Acting by Representatives at Meetings

30. Any corporation which is a member of the company may, by resolution of its directors or other governing body,
authorize such person as it thinks fit to act as its representative at any meeting of the company, and the person so
authorized shall be entitled to exercise the same powers on behalf of the corporation which he represents as that
corporation could exercise if it were an individual member of the company.
Directors
31. The number of the directors and the names of the first directors shall be determined in writing by the subscribers of the
memorandum of association or a majority of them
32. The remuneration of the directors shall from time to time be determined by the company in general meeting. Such
remuneration shall be deemed to accrue from day to day. The directors shall also be paid all travelling, hotel and other
expenses properly incurred by them in attending and returning from meetings of the directors or any committee of the
directors or general meetings of the company or in connection with the business of the company.
Borrowing Powers
33. The directors may exercise all the powers of the company to borrow money, and to mortgage or charge its
undertaking and property, or any part thereof, and to issue debentures, debenture stock and other securities,
whether outright or as security for any debt, liability or obligation of the company or of any third party.
Powers and duties of Directors
34. The business of the company shall be managed by the directors, who may pay all expenses incurred in promoting and
registering the company, and may exercise all such powers of the company as are not, by the Act or by these articles,
required to be exercised by the company in general meeting, subject nevertheless to the provisions of the Act or these
articles, and to such rule, being not inconsistent with the aforesaid provisions as may be prescribed by the company in
general meeting, but no regulation made by the company in general meeting shall invalidate any prior act of the
directors which would have been valid it that. regulation had not been made.
35. The directors may from time is to time and at any time by power of attorney appoint any company, firm or person or
body of persons whether nominated directly or indirectly by the directors, to be attorney or attorneys of the company
for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the
directors under these articles) and for such period and subject to such conditions as they may think fit, and any such
power of attorney may contain such provisions for the protection and convenience of persons dealing with any such
attorney as the directors may think fit, and may also authorize any such attorney to delegate all or any of the powers
authorities and discretions vested in him,
36. All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipt's for moneys
paid to the company, shall he signed, drawn, accepted, endorsed, or otherwise executed, as the case may be, in such
manner as the directors shall from time to time by resolution determine.
37. The directors shall cause minutes, to be made in books provided for the purpose
(a) of all appointments of officers made by the directors ;
(b) of the names of the directors present at each meeting of the directors and of any committee of the directors;
(c) of all resolutions and proceedings at all meetings of the. company, and of the directors and of committees
and every director present at any meeting of the directors or committee of directors shall sign his name in a book to be
kept for that purpose.
Disqualifications of Directors
38. The office of directors shall be vacated if the director—
(a) without the consent of the company in general meeting holds any other office of profit under the company; or
(b) becomes bankrupt or insolvent or makes any arrangement or composition with his creditors generally; or
(c) becomes prohibited from being a director by reason of any order made under the provisions of section 186 (1) of
the provision of section 186 (1) of the Act; or
(d) Becomes of unsound mind; or
(e) resigns his office by notice in writing to the company; or
(f) ceases to be a director by virture of the provisions of section 181 of the Act; or
(g) is directly or indirectly interested in any contract with the company and fails to declare the nature of his interest in
manner required by the provisions of section 203 of the act.
A director shall not vote in respect of any contract in which he is interested or any matter arising thereout, and if he
does so his vote shall not be counted.
Rotation of Directors
39. At the first annual general meeting of the company all the directors shal retire from office, and at the annual general
meeting in every subsequent year one-third of the directors for the time being or, if their number is not three or a
multiple of three, then the number is not three or a multiple of three, then the number nearest one-third, shall retire from
office.
40. The directors to retire in every year shall be those who have been longest in office since their last election, but as
between persons who becase directors on the same day those to retire shall (unless they otherwise agree among
themselves) be determined by lot.
41. A retiring director shall be eligible for re-election.
42. The company at the meeting at which a director retires in manner aforesaid may fill the vacated office by electing a
person thereto, and in default the retiring director shall, if offering himself for re-election, be deemed to have been re-
elected, unless, at such meeting it is expressly resolved not to fill such vacated office or unless a resolution for the re-
election of such director shall have been put to the meeting and lost.
43. No person other than the director retiring at the meeting shall unless recommended by the directors be eligible for
election to the office of director at any general meeting unless, not less than three or more than twelve-one days before
the date appointed for the meeting, there shall have been left at the registered office of the Company notice in writing,
signed by a ember duly qualified to attend and vote at the meeting for which such notice is given, of his attention to
propose such person for election, and also notice in writing signed by that person of his willingness to be elected.
44. The company may from time to time by ordinary resolution increase or reduce the number of directors, and may also
determine in what rotation the increased or reduced number is to retire from office.
45. The directors shall have power at any time, and from time to time, to appoint any person to be a director, either to fill a
casual vacancy or as an addition to the existing directors, but so that the total number of directors shall not at any time
exceed the number fixed in accordance with these articles. Any director
so appointed shall hold office only until next following annual general meeting, and shall then be eligible for re-
election, but shall not be taken into account in determining the directors who are to retire by rotation at such meeting.
46. The company may by ordinary resolution of which special notice has been given in accordance with the provisions of
section 138 of the Act remove any director before the expiration of his period of office notwithstanding anything in
these articles or in any agreement between the company and such director. Such removal shall be without prejudice to
any claim such director may have for damages for breach of any contract of service between him and the company.
47. The company may by ordinary resolution appoint another person in place of a director removed from office under the
immediately preceding article. Without prejudice to the powers of the directors under article 45 the company at a
general meeting may appoint any person to be a director either to fill a casual vacancy or as an additional director. The
person appointed to fill such a vacancy shall be subject to retirement at the same time as if he had become a director on
the day on which the director in whose place he is appointed was last elected a director.
Proceedings of Directors
48. The directors may meet together for the despatch of business, adjourn, and otherwise regulate their meetings, as they
think fit. Questions arising at any meeting shall be decided by a majority of votes. In the case of an equality of votes the
chairman shall have a second or casting vote. A director may, and the secretary on the requisition of a director shall, at
any time summon a meeting of the directors. It shall not be necessary to give notice of a meeting of directors to any
director for the time being absent from Sri Lanka.
49. The quorum necessary for the transaction of the business of the directors may be fixed by the directors, and unless so
fixed shall be two.
50. The continuing directors may act notwithstanding any vacancy in their body, but if and so long as their number is
reduced below the number fixed by or pursuant to the articles of the company as the necessary quorum of directors, the
continuing directors or director may act for the purpose of increasing the number of directors to that number, or of
summoning a general meeting of the company, but for no other purpose.
51. The directors may elect a chairman of their meetings and determine the period for which he is to hold office; but, if
no such chairman is elected, or if at any meeting the chairman is not present within five minutes after the time
appointed for holding the same, the directors present may choose one of the number to be chairman of the meeting.
52. The directors may delegate any of their power to committee consisting of such member or members of their body as
they think fit; any committee so formed shall in the, exercise of the powers so delegated conform to any regulations
that may be imposed on it by the directors.
53. A committee may elect a chairman of its meetings where no such chairman is elected, or if at any meeting the chairman
is not present within five minutes after the time appointed for holding the same, the members present may choose one
of their number to be chairman of the meeting.
54. A committee may meet and adjourn as it thinks proper. Questions arising at any meeting shall be determined by a
majority of votes of the members present, and in the case of an equality of votes the chairman shall have a second or
casting vote.
55. All acts done by any meeting of the directors or of a committee of directors, or by any person acting as a director, shall
notwithstanding that it be afterwards discovered that there was some defect in the appointment of any such director or
person acting as aforesaid or that they or any of them were disqualified be as valid as if every such person had been
duly appointed and was qualified to be a director.
56. A resolution in writing, signed by all the directors for the time being entitled to receive notice of a meeting of the
directors, shall be as valid and effectual as if it had been passed at a meeting of the directors duly convened and held.
Secretary
57. The secretary shall be appointed by the directors for such term, at such remuneration and upon such conditions as they
may think fit; and any secretary so appointed may be removed by them.
58. A provision of the Act or these articles requiring or authorizing a thing to be done by or to a director and the secretary
shall not be satisfied by its being done by or to the same person acting both as director and as, or in place of, the
secretary.
The Seal
59. The directors shall provide for the safe custody of the seal, which shall only be used by the authority of the directors
or of a committee of the directors authorized by the directors in that behalf on every instrument to which the seal
shall be affixed shall be signed by a director aria shall be countersigned by the secretary or by a second director or
by some, other person appointed by the directors for the purpose.
Accounts
60. The directors shall cause proper books and accounts to be kept with respect to—
(a) all sums of money received and expended by the company and the matters in respect of which the receipt and
expenditure takes place;
(b) all sales and purchases of goods by the company; and
(c) the assets and liabilities of the company.
Proper books shall not be deemed to be kept if there are not kept such books of account as are necessary to give a true
and fair view of the state of the company's affairs and to explain its transactions.
61. The books of account shall be kept at the registered office of the company, or, subject to the provisions of subsection
(3) of section 143 of the Act at such other place or places as the directors think fit, and shall always be open to the
inspection of directors.
62. The directors shall from time to time determine whether and to what extent and at what times and places and under
what conditions or rules the accounts and books or the documents or any of them shall be open to the inspection of
members not being directors, and no members (not being a director) shall have any right of inspecting any account or
book or document of the company except as conferred by statute or authorize by the directors or by the company at a
general meeting.
63. The directors shall from time to time in accordance with the provisions of sections 144, 146 and 152 of the Act cause to
be prepared and to be laid before the company at a general meeting such profit and loss accounts, balance sheets, group
accounts (if any) and reports as are referred to in these sections.
64. A copy of every balance sheet (including every document required by law to be annexed thereto) which is to be laid
before the company, in general meeting together with a copy of the auditor's report, shall not less than twenty-one days
before the date of the meeting be sent to every member of, and every holder of debentures of, the company:
Provided that this article shall not require a copy of such documents to be sent to any person of whose address the
company is not aware or to more than one of the joint holders of any debentures.
65. Auditors shall be appointed and their duties regulated in accordance with the provisions of sections 156 to 159 of the
Act.
Notices
66. A notice may be given by the company to any member either personally or by sending it by post to him or to his
registered address, of (if he has no registered address within Sri Lanka) to the address, if anv, within Sri Lanka supplied
by him to the
company for the giving of notice to him. Where a notice is sent by post, service of the notice shall be deemed to be
effected by properly addressing, preparing and posting a letter containing the notice, and to have been effected in
the case of a notice of a meeting, at the expiration of twenty-four hours after the letter containing the same is posted,
and in any other case at the time at which the letter would be delivered in the ordinary course of post
67. Notice of every general meeting shall be given in any manner hereinbefore authorized to—
(a) every member except those members who (having no registered address within Sri Lanka) have not supplied to
the company an address within Sri Lanka for the giving of notice to them ;
(b) every person being a legal personal representative or a trustee in bankruptcy of a member where the member
but for his death or bankruptcy would be entitled to receive notice of the meeting ;
(c) the auditor for the time being of the company; and
(d) the Registrar.
No other person shall be entitled to receive notice of general meeting.
Names, Addresses and Descriptions of Subscribers
(1) James Silva of Merchant.

(2) Kumara Ratnayake of Merchant
(3) John Selvanathan of Merchant
(4) Abdul Majeed of Merchant
(5) Mahen Kumaresan of . Merchant
(6) Andrew Brown of Merchant
(7) David Appuhamy of Merchant
Dated the .......... day of ........ 19......
Notary Public
TABLE D
(Section 13)
MEMORANDUM AND ARTICLES OF ASSOCIATION OF A COMPANY
LLMITED BY GUARANTEE AND HAVING A SHARE CAPITAL
1st.—The name of the Company is "The Blue Star Hotel Company Limited ".
2nd —The registered office of the company will be situated in the district of Colombo.
3rd.—The objects for which the,company is established are—

Primary Objects :
(i) The fascilitating of travel in Sri Lanka by providing hotels and conveyances by sea and by land for the
accommodation of travellers;
(2) The carrying on the business of forwarding and clearing agents, and to own, let or hire motor lorries, omnibuses,
motor launches and all types of vehicles for the conveyance of passengers and goods ;
(3) The carrying on the business of proprietors of cinema concert halls and places of amusement, recreation, sport and
entertainment.
Ancillary Objects :
(2) The carrying on the business of advertising, and to popularise and promote the tourist industry of Sri Lanka;
(3) The carrying on the business of commission agents, customs agents and warehousemen.
Other Objects :
(a) The carrying on the business of manufacturers of and dealers in tinned foods, spices, groceries and other
consumable articles;
(ii) The carrying on the business of importers, exporters, and dealers in cloth, wearing apparel, and readymade
garments.
(iii) The carrying on the business of dairymen, farmers, millers, market, gardeners and manufacturers of jam and
preserved provisions of all kinds.
(4) The liability of the members is limited.
(5) Every member of the company undertakes to contribute to the assets of the company in the event of its being
wound up while he is a member, or within one year afterwards for payment of the debts and liabilities of the company,
contracted before he ceases to be a member, and for costs, charges and expenses of winding up the same and for the
adjustment of the rights of the contributories amongst themselves, such amount as may be required, not exceeding two
hundred rupees.
(6) The share capital of the company shall consist of five hundred thousand rupees, divided into five thousand shares
of one hundred rupees each.
We, the several persons whose names and addresses are subscribed are desirous of being formed into a company in pursuance of
this memorandum of association, and we respectively agree to take the number of shares in the capital of the company set
opposite our respective names.
Names, Addresses, and Description of subscribers
Number of shares taken by each
Subscriber
(1) James Silva of ,Merchant 200
(2) Kumara Ratnayake ,Merchant 25
(3) Johan Selvanathan ,Merchant 30
(4) Abdul Majeed ,Merchant 40
(5) Mahen Kumaresan ,Merchant 15
(6) Andrew Brown , Merchant 5
(7) David Appuhamy ,Merchant 10
Total Shares taken 325
Dated the ............ day of ............ 19....
Witness to the above signatures and I do hereby testify to the number of shares subscribed for by the signatories
abovenamed.
A, B, No. 13, Main Street, Colombo. Notary Public.
ARTICLES OF ASSOCIATION TO ACCOMPANY PRECEDING MEMORANDUM OF

ASSOCIATION
The number of members with which, the company proposes to be registered is fifty, but the directors may from time to time
register an increase of members.
The rules set out in Part I of Table A of the First Schedule to the Companies Act, 1981, shall be deemed to be incorporated with these
apply to the company.
(1) James Silva of ,Merchant

(2) Kumara Ratnayake ,Merchant
(3) Johan Selvanathan Merchant ,Merchant
(4) Abdul Majeed ,Merchant
(5) Mahen Kumaresan ,Merchant
(6) Andrew Brown ,Merchant
(7) David Appuhamy ,Merchant
Dated the ……………….. day of …………….. 19 …….
Witness to the above signatures
A,B, No. 13, Main Street, Colombo. Notary Public,

(Section 13)
MEMORANDUM AND ARTICLES OF ASSOCIATION

UNLIMITED COMPANY HAVING A SHAKE C
1st—The name of the company is “The Patent Stereotype Company".
2nd—The registered office of the company will be situated in the district of Colombo.
3rd—The objects for which the company is established are—

Primary Objects :
(i) The working of a patent method of founding and casting-stereotype plates, of which method Lionel
Meegahawatte, Colombo is the sole patentee.
(ii) The purchasing or otherwise acquiring of any patent rights, trade marks, designs, licences, concessions and the
like, or other information as to any invention which may seem capable of being used for any of the purposes of
the company.
(iii) The using, exercising and granting of licences in respect of or otherwise, turning to account any such patent,
licences, concessions and the like.
Ancillary Objects :
(i) The granting of prizes, rewards and scholarships to develop and promote creative talents in general or in
particular fields.
(ii) The carrying on of business as commission, agents, general or special agents, managing agents, attorneys and
agents and secretaries.
Other Objects :
(i) The carrying on of business as mechanical engineers, machinists, fitters, founders, enamellors, electroplaters
and painters.
(ii) The carrying on of business as chemists and druggists and to deal in medicinal, chemical, industrial and other
preparations and articles.
(iii) The carrying on of business as proprietors and publishers of newspapers, journals, magazines, books and other
literary and scientific works and undertakings
We, the several persons whose names are subscribed, are desirous of being formed into a company, in pursuance of this
memorandum. of association, and we respectively agree to take the number on shares in the capital of the company set up
opposite our respective names.
Names, Addressee and Descriptions of Number of shares

Subscribers taken by each
Subscriber
(1) James Silva of Merchant 3

(2) Kumara Ratnayake of Merchant 2
(3) John Selvanathan of Merchant 1
(4) Abdul Majeed of Merchant 1
(5) Mahen Kumarasan of Merchant 2
(6) Andrew Brown of Merchant 1
(7) David Appuhamy Merchant 1
Total 11
Dated the ............ day, of,.............. 19 …….
Witness to the above signatures and I do hereby testify to the number of shares subscribed for by
the signatories above named.
A, B, No, 20, Main Street, Colombo. Notary Public;
ARTICLES OF ASSOCIATION TO ACCOMPANY THE

PRECEDING MEMORANDUM OF ASSOCIATION
1. The share capital of the company is two hundred thousand rupees divided into two
hundred sharer of one thousand rupees each.
2. The number of members with which the company proposes to be registered is twenty, but
the directors may from time to the register an increase of members.
3. The company may by special resolution—
(a) increase the share capital by such sum to be divided into shares of such amount
as the resolution may prescribe;
(b) consolidate its shares into shares of a larger amount than its existing shares ;
(c) sub-divide its shares into shares of a small amount than its existing shares ;
(d) cancel any shares which at the date of the passing of the resolution have not
been taken or agreed to be taken by any person;
(e) reduce its share capital in any way.
4. The rules set out in Part I of Table A of the First Schedule to the Companies Act, 1982
of (other than rules 41 to 47 inclusive) shall be deemed to be incorporated with these
articles and shall apply to the company.
(1) James Silva of ,Merchant

(2) Kumara Ratnayake of ,Merchant
(3) John Selvanathan of ,Merchant
(4) Abdul Majeed of ,Merchant
(5) Mahen Kumarasan of ,Merchant
(6) Andrew Brown of ,Merchant
(7) David Appuhamy of ,Merchant
Dated the .................day of .................. 19.

Notary Public.
SECOND SCHEDULE (Section 32)
FORM OF STATEMENT IN LIEU OF PROSPECTUS TO BE

DELIVERED TO REGISTRAR BY A PRIVATE COMPANY ON
BECOMING A PUBLIC COMPANY AMD REPORTS TO BE SET
OUT THEREIN
PART I
FORM OF STATEMENT AND PARTICULARS TO BE CONTAINED THEREIN THE

COMPANIES ACT, 1982
Statement in lieu of prospectus delivered for registration

by ...................................
(Insert the name of the Company)
Pursuant to the provisions of section 32 of the Companies Act, 1982
Delivered for registration by
The nominal share capital of the Rs.

company
Divided into .. Shares of Rs. each
Amount (if any) of above capital

which consists of redeemable preference
shares Shares of Rs. each
The earliest date on which the

company has power to redeem these
shares.
Names, descriptions and addresses

directors or proposed directors
334 Companies Act,
No.17 of 1982
each
Amount of shares issued Shares of Rs
Amount of commissions paid in connection

therewith
Amount of discount if any, allowed on the

issue of any shares, or so much thereof as
has not been written off at the date of the
statement.
Unless more than one year has elapsed since

the date on which the company was entitled
to commence business:—
Amount of preliminary expenses Rs.
By whom those expenses have been paid

or are payable.
Amount paid to any promoter Name of promoter :—

Amount Rs.
Consideration for the payment Consideration:—
Any other benefit given to any promoter Name of promoter ;—

Nature and value of
benefit:—
Consideration for giving of benefit
Consideration : —
If the share capital of the company is
divided into different classes of shares,
the right of voting at meetings of the
company conferred by, and the rights in
respect of capital and dividends attached to,
the several classes of shares respectively.
Number and amount of shares and debentures 1. Shares of Rs. Fully

issued within the two years preceding paid.
the date of this statement as fully or Rs. Per share
partly paid up otherwise than for cash or
agreed to be so issued at the date of this statement. 2. Shares upon which Rs..
per
Consideration for the issue of those shares share credited as paid.
or debentures 3. Debentures Rs.
Number, description and amount of any 1. Shares of Rs. and
shares or debentures which any person has debentures of Rs.
or is entitled to be given an option to subscribe
for, or to acquire from a person to whom they
have been allotted or agreed to be allotted with
a view to his offering them for sale.
2. Until
Period during which option is excercisable
Price to be paid for shares or debentures 3.

subscribed for or acquired under option
Consideration for option of right to option 4.

Consideration
Persons to whom option or right to option 5.Names &
was given or, if give to existing shareholders
or debenture holders as such, the relevant
Address
shares or debentures
Names and addresses of vendors of property

purchased or acquired by the company within
the two years preceding the date of this
statement or (2) agreed or proposed to be
purchased or acquired by the company,
except where the contract for its purchase
or acquisition was entered into in the ordinary
course of business and there is no connection
between the contract and the company ceasing
to be a private company or where the amount
of the purchase money is not material.
Amount (in cash, shares or debentures paid) or

Payable To each separate vendor.
Total Purchase
Amount in paid or payable in cash, shares Price Rs.
or debentures for any such property, specifying Cash …
the amount paid or payable for goodwill
Rs.
Short particulars of any transaction relating to Shares …
any such property which was completed within
the two preceding years in which any vendor
to the company or any person who is, or was at
the time thereof, a promoter, director or
proposed director of the company had any
interest direct or indirect,
Dates of, parties to, and general nature of every

material contract (other than contracts entered
into in the ordinary course of business or entered
into more than two years before the delivery
of this statement).
Time and place at which the contracts or

copies thereof may be inspected or (1)
in the case of a contract not reduced
into writing, a memorandum giving full
particulars thereof, and (2) in the case of a
contract wholly or partly in a language
other than the Official Language of Sri Lanka,
a copy of a translation thereof in such language
as may be specified by the Registrar or
embodying a translation in the language so
specified of the parts in such other language,
as the case may be, being a translation
certified in the prescribed manner to
be a correct translation.
Names and addresses of the auditors of the company.
Full particulars of the nature and extent of the interest of every director in any
property purchased or acquired by the company within the two years preceding
the date of this statement or proposed to be purchased or acquired by the
company or, where the interest of such a director consists in being a partner in
a firm, the nature and extent of the interest of the firm with a statement of all
sums paid or agreed to be paid to him or to the firm in cash or shares, or
otherwise, by any person either to induce him to become car to qualify him as,
a director, or otherwise for services rendered or to be rendered to the company
by him or by the firm.
Rates of the dividends (if any) paid by the company in respect of each Class
of shares in the company in each of the five financial years immediately
preceding the date of this Statement or since the incorporation of the
company whichever period is the shorter.
Particulars of the cases in which, no dividends have been. paid in respect of

any class of shares in any of these years.
…………………………………………………………………..
(Signatures of the persons above-named as directors or proposed directors or of

their agents authorized in writing.)
………………………….
………………………….
………………………….
Date: ………………..
PART II
Reports to be set out
1. Where unissued shares or debentures of the company are to be applied in the purchase of
a business, a report made by the accountants (who shall be named in the statement) upon—
(a) the profits or losses of, the business in respect of each of the five financial years
immediately preceding the delivery of the statement to the Registrar; and
(b) the assets and liabilities of the business at the last date to which the accounts of
the business were made up.
2. (1) Where unissued shares or debentures of the company are to be applied directly or indirectly in any
manner resulting in the acquisition, of shares in a body corporate which by reason of the acquisition or anything to be done
in consequence thereof or in connection therewith will become a subsidiary of the company, a report made by accountants
(who shall be named in the statement) with respect to the profits and losses and assets and liabilities of the other body
corporate in accordance with the provisions of sub-paragraph (2) or sub-paragraph (3),as the case requires, indicating how
the profits or losses of the other body corporate dealt with by report would, in respect of the shares to be acquired, have
concerned members of the company, and what allowance would have fallen to be made, in relation to assets and liabilities
go dealt with, for holders of other shares, if the company had at all material times held the shares to be acquired
(2) If the other body corporate has no subsidiaries, the report referred to in sub-paragraph (1)
shall—
(a) so far as regards profits and losses, deal with the profits or losses of the body
corporate in respect of each of the five financial years immediately preceding the
delivery of the statement to the Registrar; and
(b) so far as regards assets and liabilities, deal with the assets, and liabilities of the body
corporate at the last date to which the accounts of the body corporate were made up.
(3) Where the other body corporate has subsidiaries, the report referred to in sub-paragraph (1) shall—
24—A63752 (82/06)
(a) so far as regards profits and losses, deal separately with the other body
corporate's profits or losses as provided by sub-paragraph (2) and in addition deal
either—
(i) as a whole with the combined profits or losses of its subsidiaries, so far as they
concern members of the other body corporate, or
(ii) individually with the profits or losses of each subsidiary, so far as they concern
members of the other body corporate,
or, instead of dealing separately with the other body corporate's profits or losses,
deal as a whole with the profits or losses of the other body corporate and, so far as
they concern members of the other body corporate, with the combined profits or
losses of its subsidiaries; and
(b) so far as regards assets and liabilities, deal separately with the other body corporate's
assets and liabilities as provided by the provisions of sub-paragraph (2) and, in
addition, deal either—
(i) as a whole with the combined assets and liabilities of its subsidiaries, with or
without other body corporate's assets and liabilities; or
(ii) individually with the assets and liabilities of each subsidiary,
and shall indicate as respects the assets and liabilities of the subsidiaries the
allowance to be made for person's other than members of the company,
PART III
Provisions Applicable to Parts I and II of this Schedule
3. In this Schedule the expressions "vendor" and "financial year " shall have the same
meaning respectively assigned to them in) Part III of the Third Schedule.
4. Where in the case of a business which has been carried on, or of a body corporate which
has been carrying on business, for less than five years, the accounts of the business or
body corporate have only been made up in respect of four years, three years, two years or
one year, Part II shall have effect as if references to four years, three years, two years or
one year. In the case may be, were substituted to references to, five years.
5. Any, report required by Part II shall either indicate by way of note any adjustments as
respects the figures of any' profits or losses or assets and liabilities dealt with by the
report which appear to the persons making the report necessary or shall make those
adjustments and indicate that adjustments have been made.

6 Any report by accountants required by Part II shall be made by accountants qualified
under the Act for appointment as auditors of a a company and shall not be made by
any accountant who is an officer or servant or a partner of or in the company's
subsidiary or holding company or of a subsidiary of the company's holding company;
and for the purpose of this paragraph the expression "officer' shall include a proposed
director but not an auditor.
THIRD SCHEDULE
(Section's 32, 40, 43, 49, 405 and 407)
MATTERS TO BE SPECIFIED IN PROSPECTUS AND REPORTS TO BE SET OUT
THEREIN
PART I
Matters to be specified
1. (1) The primary objects of the company, that is to say, the objects which the
subscribers or promoters intend that the company should carry out during the period of
five years from the date of commencement of business by the company.
(2) The ancillary powers proposed to be exercised or which may need to be exercised
by the company for the purpose of carrying out its primary objects.
2. The number of founders or management or deferred shares if any, and the nature and
extent of the interest of the holders in the property and profits of the company.
3. The number of shares, if any, fixed by the articles as the qualification of a director, and
any provision in the articles as to the remuneration of the directors.
4. The names, descriptions and addresses of the directors or pro-posed directors.
5. Where shares, are offered to the public for subscription particulars as to—
(a) the minimum, amount which, in the opinion of the directors, must be raised by
the issue of those shares in order to provide the sums, or if any part thereof is to
be defrayed in any other manner, the balance of the sums, required to be
provided in respect of each of the following matters:—
(i) The purchase price of any property purchased or to be purchased which is to be
defrayed in whole or in, part out of the proceeds of the issue ;
(ii) any preliminary expenses payable by the company, and any commission so
payable to any person in consideration of his agreeing to subscribe for, or of his
procuring for agreeing to procure subscriptions for any shares in the company ;
(iii) the repayment of any moneys borrowed by the company in respect of any of the
aforesaid, matters ;
(iv) working capital, and

(b) the amounts to be provided in respect of the matters aforesaid otherwise than
out of the proceeds of the issue and the sources out of which those amounts
are to be provided.
6. The time of the opening and closing of the subscription lists.
7. The amount payable on application and allotment on each share, and in the case of
second or subsequent offer of shares, the amount offered for subscription on each
previous allotment made within the two preceding years, the amount actually allotted,
and the amount, if any, paid on the shares so allotted.
8. The number, description and amount, of any shares in, or debentures of the company
which any person, has or is entitled to be given, an option to subscribe for, together with
the following particulars of the option, that is to say—
(a) the period during which it is exercisable ;

(b) the price to be paid for shares or debentures subscribed for under it;
(c) the consideration (if any) given or to be given, for it or for the right to it;
(d) the names and addresses of the persons to whom it or the right to it was given
or, if given to existing shareholders or debenture-holders as such, the relevant
shares or debentures
9. The number and amount of shares and debentures which within the two preceding years
have been issued, or agreed to be issued, us fully or partly paid up otherwise than in cash,
and in the latter case the extent to which they are so paid up, and in. either case the
consideration for which those shares or debentures have been issued or are proposed or
intended to be issued.
10. (1) As respects any property to which this paragraph
applies—
(a) the names and addresses of the vendors,;
(b) the amount payable in cash shares or debentures to the vendor and, where
there is more than one seperate vendor, or the company is a sub-purchaser, the
amount so payable to each vendor ;
(c) short particulars of any transaction relating to the property completed within
the two preceding years in which any vendor of the property to the company
or any person who is, or was at the time of the transaction, a promoter or a
director or proposed director of the company had any interest direct or
indirect.
(2) The property to which this paragraph applies is property purchased or acquired by
the company or proposed so to be purchased or acquired, which is to be paid for
wholly or partly out
of the proceeds of the issue offered for subscription by the prospectus or the purchase or
acquisition of which has not been completed at the date of the issue of the prospectus,
other than property—
(a) the contract for the purchase or acquisition whereof was entered into in the
ordinary course if the company's business, the contract not being made in
contemplation of the issue nor the issue in consequence of the contract;
or
(b) as respects which the amount of the purchase money is not material.
11. The amount, if any, paid or payable as purchase money in cash, shares or debentures for any
property to which the last foregoing paragraph applies, specifying the amount, if any,
payable for goodwill.
12. The amount, if any, paid within the two preceding years, or payable, as commission (but not
including commission to sub-underwriters) for subscribing or agreeing to subscribe or
procuring or agreeing to procure subscriptions, for any shares in or debentures of the
company, or the rate of any such commission.
13. The amount or estimated amount of preliminary expenses and the persons by whose any of
those expenses have been paid or are payable and the amount or estimated amount of the
expenses of the issue and the persons by whom any of those expenses have been paid or
are payable.
14. Any amount or benefit paid or given within the two preceding years or intended to be paid or
given to any promoter, and the consideration for the payment or the giving of the benefit.
15. The dates of, parties to and general nature of every material contract, not being a contract
entered into in the ordinary course of the business carried on or intended to be carried on
by the company or a contract entered into more than two years before the date of issue of
the prospectus.
16. The names and addresses of the auditors, if any, of the company.
17. Full particulars of the nature and extent of the interest, if any, of every director in the
promotion of, or in the property proposed to be acquired by the company, or where the
interest of such a director consists m being a partner in a firm. the nature and extent of
the interest of the firm, with a statement of all sums paid or agreed to be paid to him or to
the firm, in cash or shares or otherwise by any person either to induce him to become, or
to qualify him as a director or otherwise for service rendered by him or by the firm in
connection with the promotion or formation of the company.
18. Where the prospectus invites the public to subscribe for shares in the company and the share
capital of the company is divided into different classes of shares, the right of voting at
meetings of the company conferred by, and the rights in respect of capital and dividends
attached to the several classes of shares respectively.
19. In the case of a company which has been carrying on business or a business which has been
carried on for less than three years the length of time during which the business of the
company or the business to be acquired, as the case may be, has been carried on.
PART II
Reports to be set out
20. (1) A report by the auditors of the company with respect to—
(a) profits and losses and assets and liabilities in accordance with the provisions of sub-
paragraph (2) or sub-paragraph (3) as the case requires ; and
(b) the rates of the dividends, if any, paid by the company in respect of each class of
shares in the company in respect of each of the five financial years immediately
preceding the issue of the prospectus giving particulars of each such class of
shares on which such dividends have been paid and particulars of the cases in which
no dividends have been paid in respect of any class of shares in respect of any of
those years,
and, if no accounts have been made up in respect of any part of the period of five years
ending on a date three months before the issue of the prospectus, containing a statement
of that fact.
(2) Where the company has no subsidiaries, the report shall—
(a) so far as regards profits and losses, deal with the profits or losses of the company in
respect of each of the five financial years immediately preceding the issue of the
prospectus; and
(b) so far as regard assets and liabilities, deal with the assets and liabilities of the
company at the last date to which the accounts of the company were made up.
(3) Where the company has subsidiaries, the report shall—

(a) so far as regards profits and losses, deal separately with the company's profit or
losses as provided by the provisions of sub-paragraph (2) and in addition, deal either
—
(i) as a whole with the combined profits or losses of its subsidiaries, so far as they
concern members of the company ; or
(ii) individually with the profits or losses of each subsidiary, so far as they
concern members of the company,
or, instead of dealing separately with the company's profits or losses, deals as a whole
with the profits or losses of the company and, so far as they concern members of the
company, with the combined profits or losses of its subsidiaries; and
(b) so far as regards assets and liabilities, deal separately with the company's assets
and liabilities as provided by the provisions of sub-paragraph (a), and in, addition
deal either—
(i) as a whole with combined assets and liabilities at its subsidiaries, with or
without the company's assets and liabilities ; or
allowance to be made for persons other than members of the company
21. Where the proceeds, or any part of the proceeds, of the issue of the shares or and debentures
are or is to be applied directly or indirectly in the purchase of any business, a report made by
accountants (who shall be named in the prospectus) upon—
(a) the profits or losses of the business in respect of each of the five financial years
immediately preceding the issue of the prospectus; and
(b) the assets and. liabilities of the business at the last date to which the accounts of the
business were made up.
22. (1) Where—
(a) the proceeds; or any part of the proceeds of the issue of the shares or debentures
are or is to be applied directly or indirectly in any manner resulting in the acquisition
by the company of shares in any other body corporate; and
(b) by reason of that acquisition or anything to be done in consequence thereof or in
connection therewith that body corporate will become a subsidiary of the company,
a report made by accountant (who shall be named in the prospectus) upon—
(i) the profits or losses of the other body corporate in respect of each of the five
financial years immediately preceding the date of issue of the prospectus ; and
(ii) the assets and liabilities of the other body corporate at the last date to which the
accounts of the body corporate were made up.
(2) The report referred to in paragraph (1) shall—
(a) indicate how the profits or losses of the other body corporate dealt with in the
report would, in respect of the shares to be acquired, have concerned members
of the company and what allowance would have fallen to be made, in relation to
assets and liabilities so dealt with, for holders of other shares, if the company
had at all material times held the shares to be acquired; and
(b) where the other body corporate has subsidiaries to deal with the profits or losses
and the assets and liabilities of the body corporate and its subsidiaries in the
manner provided by sub-paragraph (3) of paragraph 20 in relation to the
company and its subsidiaries.
PART III
Provisions applicable to Parts I and II of this Schedule
23. The provisions of paragraphs 3 4, 13 (so far as it relates to preliminary expenses) and 17 shall
not apply in the case of a prospectus issued more than two years after the date on which
the company is entitled to commence business.
24. Every person shall for the purpose of this Schedule, be deemed to be a vendor who has
entered into any contract absolute or conditional, for the sale or purchase, or for any
option of purchase, of any property to be acquired by the company, in any case where—
(a) the purchase money is not fully paid at the date of the issue of the prospectus;
(b) the purchase money is to be paid or satisfied wholly or in part out of the
proceeds of the issue offered for subscription by the prospectus;
(c) the contract depends for its validity or fulfilment on the result of that issue.
25. Where any property to be acquired by the company is to be taken on lease, this Schedule shall
have effect as if the expression “vendor" included the lessor, the expression " purchase
money " included the consideration for the lease, and the expression " sub-purchaser "
included a sub-lessee.
26. Any reference in paragraph 8 to subscribing for shares or debenture shall include acquiring
them from a person to whom they have been allotted or agreed to be allotted with a view
to his offering them for sale.
27. For the purposes of paragraph 10 where the vendors or any of them are a firm, the members
of the firm shall not be treated as seperate vendors.
28. Where in" the case of a company which has been carrying on business or of a business which
has been carried on for less than five years, the accounts of the company or business have
only been made up in respect of four years, three years, two years or one year, Part II
shall have effect as if reference to four years, three years, two years or one year, as the
case may be, were substituted for references to five years.
29. The expression " financial year " in Part II means the year in respect of which the accounts of
the company or of the business, as the case may be, are made up, and where by reason of
any alteration of the date on which the financial year of the company or business
terminates the accounts of the company or business have been made up for a period
greater or less than a year, that greater or less period shall for the purposs of the such part
be deemed to be a financial year.
30. Any report required by Part II shall either indicate by way of note any adjustments as
respect the figures of any profits or losses or assets and liabilities dealt with by the
report which appear to the person making the report necessary or shall make those
adjustments and indicates that adjustments have been made.
31. Any report by accountants required by Part II shall be made by accountants qualified under
the Act, for appointment as auditors of a company and shall not be made by any
accountant, who is an officer or servant, or a partner of or in the employment of an
officer or servant, of the company or of the company's subsidiary or holding company or
of a subsidiary of the company's holding company and or the purpose of this paragraph
the expression " officer " shall include a proposed director but not an auditor.
FOURTH SCHEDULE (Section 50)
FORM OF STATEMENT IN LIEU OF PROSPECTUS TO BE

DELIVERED TO REGISTRAR BY A COMPANY WHICH DOES
NOT ISSUE A PROSPECTUS OR WHICH DOES NOT GO TO
ALLOTMENT ON A PROSPECTUS ISSUED AND REPORTS TO
BE SET OUT THEREIN
PART I
FORM OF STATEMENT AND PARTICULARS TO BE

CONTAINED THEREIN STATEMENT IN LIEU OF
PROSPECTUS DELIVERED FOR REGISTRATION BY (INSERT
THE NAME OF THE COMPANY)
Pursuant to the provisions of section 50 (1) of the Companies Act, 1982
Delivered for registration by
The nominal share capital of the … Rs.
Divided into … Share of Rs. each

Share of Rs. each
Share of Rs. each
Amount (if any) of above capital which Share of Rs. each
consists of redeemable preference shares
The earliest date on which the company has power to redeem these
shares
Names, descriptions and addresses of directors or proposed directors

If the share capital of the company is divided into different classes
of shares the right of voting at meeting of the company conferred
by
and the rights in respect of capital and dividends attached to the
several classes of shares respectively
Number and amount of shares and debentures

1. Shares of Rs.
agreed to be issue as fully or partly paid up 2. Fully paid shares
otherwise than in cash upon. which Rs.
per share credited
The consideration for the intended issue of
these shares and debentures to the company
3. Debentures
or any person who is, or was at the time
thereof, a promoter director or proposed
Rs.
director of the company and had any interest 4.
direct or indirect Consideration
Number, description and amount of 1. Shares of Rs. and

any shares or debentures which any person debentures of Rs.
has or is entitled to be given an option to
subscribe for, or to acquire from a person to
whom they have been allotted or agreed to
be allotted with a view to this offering them
for sale
2. Until
Period during which option is exercisable
Price to be paid for shares or debentures 3.

subscribed for or acquired under option
4. Consideration
Consideration for option or right to option
Persons to whom option or right to option 5. Names and

was given or, if given to existing shareholders addresses
or debenture holders as such, the relevant share
or debentures
Names and addresses of vendors of property

purchased or acquired, or proposed to be
purchased or acquired, by the company except
where the contract for its purchase or acquisition
was entered into in the ordinary course of the
business intended to be carried on by the company
or the amount of the purchase money is not material
Amount (in cash, shares or debentures)

payable to each separate vendor
Total purchase price
Amount (if any) paid or payable (in cash or
shares or debentures) for any such property, Rs.
specifying amount (if any) paid or payable for Cash Rs.
goodwill Shares Rs.
Debentures Rs.
Short particulars of any transaction relating to

any such property which was completed within
the two preceding years and in which any
vendor to the company or any person who is ,
or was at the time thereof, a promoter director
or proposed director of the company had any
interest direct or indirect.
Amount (if any) paid or payable as

commission for subscribing or agreeing to Amount paid
subscribe or procureing or agreeing to procure Amount
subscriptions for any shares or debentures in payable
the company; or
Rate per
Rate of Commission centum
The number of shares if any, which persons

have agreed for a commission to subscribe
absolutely
Rs.
Estimated amount of preliminary expenses
Name of
By whom those expenses have been paid
or are payable. promoter
Amount paid or intended to be paid to

Amount Rs.
any promoter
Consideration for the payment

Consideration
Any other benefit given or intended to be Name of Promoter

given to any promoter Nature and value of
benefit
Consideration
Consideration for giving of benefit
Dates of parties to and general nature of every

material contract (other than contracts entered
into in the ordinary course of the business
intended to be carried on by the company or entered
into more than two years before the delivery
of this statement)
Time and place at which the contracts or copies

thereof may be inspected or (1) in the case of a
contract not reduced into writing a memorandum
giving full particulars thereof, and (2) in the case
of a contract wholly or partly in a language other
than in the official language of Sri Lanka, a copy
of a translation in such language as may be
specified by the Registrar or embodying a
translation in the
348 Companies Act, No.17 of
1982
language so specified of the parts in such other

languages as the case may be, being a translation
certified in the prescribed manner to be a correct
translation
Names and addresses of the auditors of the

company (if any)
Full particulars of the nature and extent of the

interest of every director in the promotion of or
in the property proposed to be acquired by the
company, or where the interest of such a director
consists in being a partner in a firm, the nature
and extent of the interest of the firm, with a
statement of all sums paid or agreed to be paid to
him or the firm in cash or shares or otherwise,
by any person either to induce him to become
or to qualify him as a director, or otherwise
for services rendered by him or by the firm in
connection with the promotion or formation
of the company.
The primary objects of the company, that is to

say, the objects which the subscribers or
promoters intend that the company should
carry out during the period of five years from
the commencement of business by the company.
The ancillary powers proposed to be excercised

or which may need to be excercised by the
company for the purposes of carrying out its
primary objects.
(Signature of the persons above named as

directors or proposed directors, or of their agents
authorized in writing)
PART II
REPORTS TO BE SET OUT
1. Where it is proposed to acquire a business, a report made by the accountants (who

shall be named in the statement) upon-
(a) the profits or losses of the business in respect of each of the five financial years
immediately preceding the delivery of the statement to the Registrar; or
(b) the assets and liabilities of the business at the last date to which the accounts of
the business were made up.
2. (1) Where it is proposed to acquire shares in a body corporate which by reason of the
acquisition or anything to be done in consequence thereof or in connection therewith
will become a subsidiary of the company, a report made by accountants (who shall be
made in the statement) with respect to the profits and losses and assets and liabilities of
the other body corporate in accordance with sub-paragraph (2) or sub-paragraph (3),
as the case requires, indicating how the profits or losses of the other body corporate
dealt with by the report would, in respect of the shares to be acquired, have concerned
members of the company, and what allowance would have fallen to be made, in
relation to assets and liabilities so dealt with for holders of other shares, if the
company had at all material times held the shares to be acquired.
(2) Where the other body corporate has no subsidiaries, the report referred to in the
provisions of sub-paragraph (1) shall -
(a) so far as regards profits and losses, deal with the profits or losses of
the body corporate in respect of each of the five financial years
immediately proceeding the date of delivery of the statement to the
Registrar; and
(b) so far as regards assets and liabilities, deal with the assets and
liabilities of the body corporate at the last date to which the accounts
of the body corporate were made up.
(3) Where the other body corporate has subsidiaries , the report referred to in sub-
paragraph (1) shall
(a) so far as regards profits and losses, deal seperately with the other
body corporate's profits and losses as provided by the provisions of
sub-paragraph (2) and in addtion deal either
(i) as a whole with the combined profits and losses of its subsidiaries, so far
as they concern members of the other body corporate.
(ii) individually with the profits or losses of each subsidiary, so far as they
concern members of the other body corporate.
or, instead of dealing seperately with the other body corporate's profits or
losses, deal as a whole with the profits or losses, deal as a whole with the
profits or losses of the other body corporate and, so far as they concern
members of the other body corporate, with the combined profits or losses of its
subsidiaries; and
(b) so far as regards assets and liabilities, deal separately with the other
body corporate assets and liabilities as provided by the provisions of
sub-paragraph (2) and in addition, deal either—
(i) as a whole with the combined assets and liabilities as
of its subsidiaries, with or without the other body corporate's assets and
liablities ; or
allowance to be made for persons other than members of the company.
PART III
PROVISIONS APPLICABLE TO PARTS I AND II OF THIS SCHEDULE
3. In this Schedule the expressions "vendor" and " financial year " shall have the same
meaning respectively assigned to them in Part III of the Third Schedule.
4. If in the case of a business which has been carried on or of a body corporate which has
been carrying on business, for less than five years, the accounts of the business or body
corporate have only been made up in respect of four years, three years, two years, or one
year. Part II shall have effect as if references to four years, three years, two years or one
year, as the case may be, were substituted for references to five years.
5. Any report required by Part II shall either indicate by way of note any adjustments as
respects the figures of any profits or losses or assets and liabilities dealt with by the report
which appear to the persons making the report necessary or shall make those adjustments
and indicate that adjustments have been made.
6. Any report by accountants required by Part II shall be made by accountant qualified under the
Act for appointment as auditors of a company and shall not be made by any accountant
who is an officer or servant or a partner of or in the company's subsidiary or holding
company or of a subsidiary of the company's holding company ; and for the purposes of
this paragraph the expression "officer" shall include a proposed director but not an
auditor.
FIFTH SCHEDULE
(Sections 58, 145, 148, 152)
ACCOUNTS
PRELIMINARY
1. Paragraphs 2 to 11 of this Schedule apply to the balance sheet and the provisions of
paragraphs 12 to 14 to the profit and loss account, and are subject to the exceptions
and modifications provided for by Part II, in the case of a holding company and by
Part III, in the case of companies of the classes therein mentioned; and this Schedule
has effect in addition to the provisions of sections 200 and 201 of the Act.
PART I
GENERAL PROVISIONS AS TO BALANCE SHEET AND PROFIT AND LOSS ACCOUNT
BALANCE SHEET
2. The authorized share capital, issued share capital, liabilities and assets shall be summarised
with such particulars as are necessary to disclose the general nature of the assets and
liabilities, and 'there shall be specified—
(a) any part of the issued capital that consists 'of redeemable preference shares and
on which the company has power to redeem those shares;
(b) so far as the information is not given in the profit and loss account any share
capital on which interest has been paid out of capital during the financial year,
and the rate at which interest has been so paid;
(c) the amount of the share premium account;
(d) particulars of any redeemed debentures which the company has power to re-
issue.
3. There shall be stated under separate headings, so far as they are not written off—
(a) the preliminary expenses ;
(b) any expenses incurred in connection with any issue of share capital or
debentures;
(c) any sums paid by way of commission in respect of any shares or debentures
(d) any sums allowed by way of discount in respect of any debentures; and
(e) the amount of the discount allowed on any issue of shares at a discount,
4. (1) The reserves provisions, liabilities and fixed and current

assets shall be classified under headings appropriate to the company's business :
Provided that—
(a) where the amount of any class is not material it may be included under
the same heading as some other class ; and
(b) where any assets of one class are not separable from assets of another
class, those assets may be included under the same headings.
(2) Fixed assets shall also be distinguished from current assets.

(3) The method or methods used to arrive at the amount of the fixed assets under
each heading shall be stated.
5. (1) The method of arriving at the amount of any fixed assets shall subject to the
provisions of sub-paragraph (2), be to take the difference between—
(a) its cost or if it stands in the company's books at a valuation, the amount
of the valuation ; and
(b) the aggregate amount provided or written off since the date of
acquisition or valuation, as the case may be, for depreciation or
diminution in value,
and for the purpose of this paragraph the nett amount at which any assets stand in
the company's books on the appointed date (after deduction of the amounts
previously provided or written off for depreciation or diminution in value) shall,
where the figures relating to the period before that date cannot be obtained
without unreasonable expense or delay be treated as if it were the amount of a
valuation of those assets made on that date and where any of those assets are
sold, the said nett amount less the amount of the sales shall be treated as if it
were the amount of a valuation so made of the remaining assets.
(2) The provisions of sub-paragraph (1) shall not apply—
(a) to assets for which the figures relating to the period beginning on the
appointed date, cannot be obtained without unreasonable expense or
delay; or
(b) to assess the replacement of which is provided for wholly or partly—
(i) making provision for renewals and charging the cost of
replacement against the provisions so made; or
(ii) by charging the cost of replacement direct to revenue ;
or
(c) to any investments of which the market value (or in the case of
investments not having a market value, their value as estimated by the
directors) is shown either as this amount of the investments or by way
of note ; or
(d) to, goodwill, patents or trade marks.
(3) For the assets under each heading whose amounts arrived at in accordance with
the provisions of sub-paragraph (1) there shall be shown—
(a) the aggregate of the amounts referred to in clause (a) thereof; and
(b) the aggregate of the amounts referred to in clause (b) thereof.
(4) As respects the assets under each heading whose amount is not arrived at in
accordance with the provisions of sub-paragraph (1) because their replacement
is provided for as referred to in sub-paragraph (2) (b), there shall be stated—
(a) the means by which their replacement is provided for; and
(b) the aggregate amount of the provisions (if any) made for renewals and
not used.
6 6. The aggregate amounts respectively of capital reserves, revenue reserves and
provisions (other than provisions for depreciation, renewals or diminution in value of
assets) shall be stated under separate headings :
Provided that—
(a) the provisions of this paragraph shall not require a separate statement of any of
the said three amounts which is not material; and
(b) the Registrar may direct that it shall not require a separate statement of the
amount of provisions where he is satisfied that this is not required in the public
interest and would prejudice the company, but subject to the condition that any
heading stating an amount arrived at after taking into account a provision (other
than as aforesaid) shall be so framed or marked as to indicate that fact.
7. (1) There shall also be shown (unless it is shown in the profit and loss account or a
statement or report annexed thereto, or the amount involved is not material)—
(a) where the amount of the capital reserves, of the revenue reserves or of
the provisions (other than provisions for depreciation, renewals or
diminution in value of assets) show an increase so compared with the
amount at the end of the immediately preceding financial year, the
source from which the amount of the increase has been derived , and
(b) where—
(i) the amount of the capital reserves or of the revenue reserves shows
a decrease as compared with the amount at the end of the
immediately preceding financial year; or
(ii) the amount at the end of the immediately preceding financial year
of the provisions (other than provisions for depreciation, renewals
or diminution in value of assets) exceeded the aggregate of the
sums since applied and amount still retained for the purpose
thereof,
the application of the amounts derived from he difference.
(2) Where the heading showing any of the reserves or provisions aforesaid is divided into
sub-headings the provisions of this paragraph shall apply to each of the separate amounts
shown in the sub-headings instead of applying to the aggregate amount thereof.
8. (1) There shall be shown under separate heading—
(a) the aggregate amounts respectively of the company's trade investments,
quoted investments other than trade investments and unquoted
investments other trade investments ;
;
3S—A 63752 (82/06)
(b) if the amount of the goodwill and of any patents and trademarks or part
of that amount is shown as a separate item in or is otherwise
ascertainable from the books of the company, or from any contract for
the sale or purchase of any property to be acquired by the company, or
from any documents in the possession of the company relating to the
stamp duty payable in respect of any such contract or the conveyance
of any such property, the said amount so shown or ascertainble and as
so shown or ascertained as the case may be ;
(c) the aggregate amount of any outstanding loans under the authority of
the provisions of paragraphs (b) and (c) of the proviso to subsection (1)
of section 55 of the Act
(d) the aggregate amount of bank loans and overdrafts ;
(e) the net aggregate amount which is recommended for distribution by
way of dividend.
(2) Nothing in the provisions of sub-paragraph, (1) (b) shall be taken as requiring
the amount of the goodwill, patents and trademarks to be stated otherwise than
as a single item.
9. Where any liability of the company is secured otherwise than by operation of law on any
assets of the company, the fact that liability is so secured shall be stated but it shall not be
necessary to specify the assets on which the liability is secured.
10. Where any of the company's debentures are held, by a nominee of or trustee for the
company, the nominal amount of the debentures and the amount at which they are stated
in the books of the company shall be stated.
11. (1) The matters referred to in this paragraph shall be stated by way of note, or in a
statement or report annexed is not otherwise shown.
(2) The number, description and amount of any shares in the company which any person
has an option to subscribe for, together with the following particulars of the option,
that is to say—
(a) the period during which it is exercisable ;
(b) the price to be paid for shares subscribed for under it.
(3) The amount of any arrears of fixed cumulative dividends on the company's shares
and the period for which the dividends or if there is more than one class each class of
them are in arrear, the amount to be stated before deduction of income tax except
that in the case of tax free dividends, the amount shall be shown free of tax and the
fact that it so shown shall also be stated.
(4) Particulars of any charge on the assets of the company, to secure the liabilities of any
other person, including where practicable, the amount secured.
(5) The general nature of any other contingent liabilities not provided for and, where
practicable, the aggregate amount or estimated amount of those liabilities, if it is
material
(6) Where practicable the aggregate amount or estimated amount, if it is material of

contracts for capital expenditure so far as not provided.
(7) Where in the opinion of the directors any of the current assets have not a value, on
realisation in the ordinary course of the company's business, at least equal to the
amount at which they are stated, the fact that the directors are of that opinion.
(8) The aggregate market value of the company's quoted investments, other than trade
investments, where it differs from the amount of the investments as stated.
(9) The basis on which foreign currencies have been converted into rupees where the
amount of the assets or liabilities affected is material.
(10) The basis on which the amount, if any, set aside for Sri Lanka income tax is
computed.
(11) Except in the case of first balance sheet laid before the company after the appointed
date, the corresponding amounts at the end of the immediately preceding financial
year for all items shown in the balance sheet.
PROFIT AND LOSS ACCOUNT

12. (1) There shall be shown—
(a) the amount charged to revenue by way of provision for depreciation
renewals or diminution in value of fixed assets;
(b) the amount of the interest on the company's debentures and other fixed
loans ;
(c) the amount of the charge for Sri Lanka income tax and other Sri Lanka
taxation on profits, including where practicable as Sri Lanka income
tax any taxation imposed elsewhere to the extent of the relief, if any,
from Sri Lanka income tax and distinguishing where practicable
between income tax and other taxation ;
(d) the amounts respectively provided for redemption of share capital and
for redemption of loans;
(e) the amount of material, set aside or proposed to be set aside, to or
withdrawn from reserves;
(f) subject to the provisions of sub-paragraph, (2). The amount if material,
set aside to provisions other than provisions for depreciation, renewals
or diminution in value of assets or, as the case may be, the amount, if
material, withdrawn from such provisions and not applied for the
purpose thereof;
(g) the amount of income from investments, distinguishing between trade
investments and other investments;
(h) the aggregate amount of the dividends paid and proposed.
• 26 —A 63752(83/06)
(2) The Registrar of Companies may direct that a company shall not be obliged to show
an amount set aside to provisions in accordance with the provisions of sub-paragraph (1) (f), if
the Registrar is satisfied that that is not required in the public interest and would prejudice the
company, but subject to the condition that any heading stating an amount arrived at after
taking into account the amount set aside as aforesaid shall be so framed or marked as to
indicate that fact
13. Where the remuneration of the auditors is not fixed by the company in general meeting,
amount thereof shall be shown under a separate heading, and for the purpose of this
paragraph any sums paid by the company in respect of the auditors' expenses shall be
deemed 'to be included in the expression "remuneration ".
14. (1) The matters referred in this paragraph shall be stated by way of note, if not otherwise
shown.
(2) If depreciation or replacement of fixed assets is provided for by some method
other than a depreciation charge or provisions for renewals or is not provided
for, the method by which it is provided for or the fact that it is not provided for,
as the case may be.
(3) This basis on which the charge for Sri Lanka income tax is computed.
(4) Whether or not the amount stated for dividends paid and proposed is for
dividends subject to deduction of income tax.
(5) Except in the case of the first profit and loss account laid before the company
after the appointed date, the corresponding amounts, for the immediately
preceding financial year for all items shown in the profit and loss account.
(6) Any material respects in which any items shown in the profit and loss account
are affected—
(a) by transactions of a sort not usually undertaken by the company or
otherwise by circumstances of an exceptions or non-recurrent nature; or
(b) by any change in the basis of accounting.
(7) Whether and director of the company is, directly or indirectly, interested in any
contract with the company and if so, the nature of his interest.
PART II
SPECIAL PROVISIONS WHERE THE COMPANY IS A HOLDING OF SUBSIDIARY
COMPANY, MODIFICATIONS OF AND ADDITIONS TO REQUIREMENTS AS TO
COMPANY’S OWN ACCOUNTS
15. (1) The provisions of this paragraph shall apply where the company is a holding
company, whether or not it is itself a subsidiary of another body corporate.
(2) The aggregate amount of assets consisting of shares in or amounts owing
(whether on account of a loan or otherwise) from, the company's subsidiaries,
distinguishing shares from indebtedness, shall be set out in the balance sheet separately
from all the
other assets of the company and the aggregate amount of undebtedness (whether on account of
a loan or otherwise) to the company's subsidiaries shall be so set but separately from all its
other liabilities and—
(a) the reference in Part I to the company's investments shall not include
investments in its subsidiaries required by the provisions of this paragraph to be
separately set out; and
(b) the provisions of paragraph 5, sub-paragraph (1) (a) of paragraph 12, sub-paragraph (2)
of paragraph 14 shall not apply in relation to fixed assets consisting of interests in the
company's subsidiaries.
(3) There shall be shown by way of note on the balance sheet or in a statement or
report annexed thereto the number, description and amount of the shares in and
debentures, of the company held by its subsidiaries or their nominees, but excluding any
of those shares or debentures in the case of which the subsidiary is concerned as personal
representatives or in the case of which it is concerned as trustee and neither the company
nor any subsidiary thereof is beneficially interested under the trust, otherwise than by
way of security only for the purposes of a transaction entered into by it in the ordinary
course of business which includes the lending of money.
(4) Where group accounts are not submitted, there shall be annexed to the balance
sheet a statement showing.—
(a) the reason why subsidiaries are not dealt with in group accounts;
(b) the nett aggregate amount, so far as it concerns members of the holding company and is
not dealt with in the company's accounts, of the subsidiaries' profits after deduction of the
subsidiaries' losses (or vice versa)—
(i) for the respective financial year of the subsidiaries ending with or during the financial
year of the company; and
(ii) for their previous financial years since they respectively become the holding company's
subsidiary;
(c) the net aggregate amount of the subsidiaries; profit after deducting the subsidiaries'
losses (or vice versa)—
(i) for the respective financial years of the subsidiaries ending with or during the financial
year of the company; and
(ii) for their previous financial years since they respectively become the holding company's
subsidiary,
so far these profits are dealt with or provisions is made for those losses in the company's accounts;
(d) any qualifications contained in the report of the auditors of the subsidiaries on their
accounts for their respective financial years ending as aforesaid, and any note or saving
contained in those accounts to call attention to a matter which, apart from the note or
saving, would properly have been referred to in such a qualification, in so
far as the matter which is the subject of the qualification or note is not covered by the
company's own account and is material from the point of view of its members ; or in so
far as the information required by this sub-paragraph is not obtainable, a statement
that it is not obtainable:
Provided that the Registrar may on the application or with the consent of the company's
directors, direct that in relation to any subsidiary this sub-paragraph shall not apply or
shall apply only to such extent as may be provided by the direction.
(5) The provisions of paragraphs (b) and (c) of the sub-paragraph (4) shall apply
only to profits and losses of a subsidiary which may properly be treated in the
holding company's accounts as revenue profits or losses, and the profits or losses
attributable to any shares in a subsidiary for the time being held by the holding
company or any other of its subsidiaries shall not (for that or any other purpose)
be treated as aforesaid so far as they are profits or losses for the period before
the date on or as from which the shares were acquired by the company or any of
its subsidiaries, except that they, may in a proper case be so treated where—
(a) the company is itself the subsidiary of another body corporate ; and
(b) the shares were acquired from that body corporate or a subsidiary of it
and for the purpose of determining whether any profits or losses are to be treated as
profits or losses for the said period the profit or loss for any financial year of the
subsidiary may, if it is not practicable to apportion it with reasonable accuracy by
reference to the facts, be treated as accruing from day to day during that year and be
apportioned accordingly.
(6) Where group accounts are not submitted, there shall be annexed to the balance
sheet a statement showing, in relation to the subsidiaries (if any) whose financial
years did not end with that of the company—
(a) the reasons why the company's directors consider that the subsidiaries'
financial year should not end with that of the company; and
(b) the date on which the subsidiaries' financial years ending last before
that of the company respectively ended or the earliest and latest of
those days.
16. (1) The balance sheet of a company which is a subsidiary of another body corporate,
whether or not it is itself a holding company, shall show the aggregate amount of its
indebtedness to all bodies corporate of which it is a subsidiary, or a fellow subsidiary
359 Companies Act, No.17of 1982
and the aggregate amount of indebtedness of all such bodies corporate to it,
distinguishing in each case between, indebtedness in respect of debentures and otherwise.
(2) For the purpose of this paragraph a company shall be deemed to be a fellow
subsidiary of another body corporate if both are subsidiaries of the same body
corporate but neither is the others.
CONSOLIDATED ACCOUNTS OF HOLDING COMPANY AND SUBSIDIARIES
17. Subject to the provisions of the following paragraphs, the consolidated balance sheet and
profit and loss acount shall combine the information contained in the separate balance
sheets and profit and loss accounts of the holding company and of the subsidiaries dealt
with by the consolidated accounts, but with such adjustments (if any) as the directors of
the holding company think necessary.
18. Subject as aforesaid and to Part III the consolidated accounts shall, in giving the said
information, comply, so far as practicable with the requirements of the Act as if they
were the accounts of an actual company.
19. The provisions of sections 145 and 148 of the Act shall not by virtue of the provisions of
paragraphs 17 and 18 apply for the purpose of the consolidated accounts.
20. The provisions of paragraph 7 shall not apply for the purpose of any consolidated
accounts laid before a company with, the first balance sheet so laid after the appointed
date.
21. In relation to any subsidiaries of the holding company not dealt with by the consolidated
accounts—
(a) the provisions of sub-paragraphs (2) and (3) of paragraph 15 shall apply for the
purpose of those accounts as if those accounts were the accounts of an actual
company of which they were subsidiaries ; and
(b) there shall be annexed in the like statement as is required by the provisions of
sub-paragraph (4) of paragraph 15 where there are no group accounts but as if
reference therein to the holding company's accounts were references to the
consolidated accounts.
22. In relation to any subsidiaries (whether or not dealt with by the consolidated accounts),
whose financial years did not end with that of the company there shall be annexed the
like statement as is required by the provisions of sub-paragraph (6) of paragraph 15
where there are no group accounts.
PART III
EXCEPTIONS FOR SPECIAL CLASSES OF COMPANY
23. (1) A banking or discount company shall not be subject to the requirements of Part I
other than—
(a) as respects its balance sheet, the requirements of paragraphs 2 and 3;
paragraph 4 (so far as it relates to fixed and current assets), paragraph 8
(except sub-paragraph (1), (d), paragraph 9 and 10, and paragraph 11
(except sub-paragraph (8) ; and
(b) as respects its profits and loss account, the requirements of sub-
paragraph (1) (a) of paragraph 12, paragraph 13 and sub-paragraphs
(1), (4) and (5) of paragraph 14,
but where in its balance sheet capital reserves, revenue reserves or provisions (other than
provisions for depreciation, renewals or diminution in value of assets) are not stated
separately, any heading stating an amount arrived at after taking into account such a
reserve or provision shall be so framed or marked as to indicate that fact and its profit and
loss account shall indicate by appropriate works the manner in which the amount stated
for the company's profit or loss has been arrived at.
(2) The account of a banking or discount company shall not be deemed, by reason
only of the fact that they do not comply with any requirements of the said Part I
from which the company is exempt by virtue of the provisions of this paragraph,
not to give the true and fair view required by the Act.
(3) In this paragraph the expression " banking or discount company " means any
company which satisfies the Registrar that it ought to be treated for the purpose
of this Schedule as a banking company or as a discount company.
24. (1) In relation to an insurance company which is subject to and complies, with the
requirements of any written law relating to insurance as respect the preparation and
deposit of a balance sheet and profit and loss account the provisions paragraph 23 shall
apply as it applies in relation to banking or discount company, and such an insurance
company shall also not be subject to the requirements of sub-paragraph (1) (a) and (3) of
paragraph 8 and sub-paragraphs (4) to (7) and sub-paragraph (10) of paragraph 11:
Provided that the Registrar may direct that any such insurance company whose business
includes to a substantial extent business other than insurance business shall comply with
all requirement
of the said Part I or such of them as may be specified in the direction and shall comply
therewith as respects either the whole of its business or such part thereof as may be so
specified.
(2) Where an insurance company is entitled to the benefit of the provisions of this
paragraph, then any wholly owned subsidiary thereof shall also be so entitled if
its business consists only of business which is complementary to insurance
business of the classes carried on by the insurance company.
(3) For the purpose of the provisions of this paragraph a company shall be deemed
to be the wholly owned subsidiary of an insurance company if it has no
members except the insurance company and the insurance company's wholly
owned subsidiaries and its or their nominees.
25. (1) A company to which this paragraph applies shall not be subject to the following
requirements of this Schedule, that is to say—
(a) as respects its balance sheet those of paragraph 4 (except so far as the
said paragraph relates to fixed and current assets) and paragraphs 5, 6
and 7; and
(b) as respects its profit and loss account those of sub-paragraphs (1) (a),
(e), and (f) of paragraph 12,
but a company taking advantage of this paragraph shall be subject, instead of the said
requirements, to any prescribed conditions as respects matters to be stated in its accounts
or by way of note thereto, and as respects information to be furnished to the Registrar or a
person authorised by them to require it.
(2) The accounts of a company shall not be deemed, by reason only of the fact that
they do not comply with any requirements of Part I of the Schedule from which
the company is exempt by virtue of this paragraph, not to give the true and fair
view required by the Act.
(3) The provisions of this paragraph applies to companies of any class prescribed
for the purpose thereof and a class of companies may be so prescribed if it
appears to the Registrar desirable in the national interest :
Provided that, if the Registrar is satisfied that any of the conditions prescribed for the
purposes of this paragraph has not been complied with in the case of any company, they
may direct that so long as the direction continues in force the provisions of this paragraph
shall not apply to the company.
28. Where a company entitled to the benefit of any provision contained in this Part is a
holding company, the reference in Part II to consolidated accounts complying with the
requirements of the Act, shall, in relation to consolidated accounts or that company be
construed as reference to those requirements in so far only as they apply to the
separate accounts of that company,
PART IV
INTERPRETATION OF SCHEDULE
27. (1) For the purposes of this Schedule, unless, the context
otherwise requires—
(a) the expression "provision" shall, subject to the provisions of sub-

paragraph (2) mean any amount written off or retained by way of
providing for depreciation renewals or diminution in value of assets or
retained by, way of (providing for any known liability of which the
amount cannot be determined with substantial accuracy;
(b) the expression "reserve" shall not subject as aforesaid, include any
amount written off or retained by way of providing for depreciation,
renewals or diminution in value of assets or retained by way of
providing for any known liability ;
(c) the expression "capital reserve" shall not include any amount regarded
as free for distribution through the profit and loss account and the
expression "revenue reserve" shall mean any reserve other than a capital
reserve,
and in this paragraph the expression " liability " shall include all liabilities in respect of
expenditure contracted for and all disputed or contingent liabilities.
(2) Where—
(a) any amount written off retained by way of providing to depreciation, renewals
or diminution in value of assets, not being an amount written off in relation to
fixed assets before the appointed date; or
(b) any amount retained by way of providing for any known liability,
is in excess of that which in the opinion of the directon is reasonably necessary for the
purpose, the excess shall be treated for the purposes of this Schedule as a reserve and not
as a provision.
SIXTH SCHEDULE (Section 120)
FORM OF ANNUAL RETURN OF A COMPANY HAVING A SHARE CAPITAL
Annual Return of the Company, Limited made up to the day of, 19… (being the fourteenth day
after the date of the first or only ordinary general meeting in 19 ……)
The address of the registered office of the Company is as follows:
SUMMARY OF SHARE CAPITAL AND SHARES
*Nominal Share Capital Rs. divided into Shares of Rs. …….

each
Total number of shares taken upto the day of ……
19….., being the date of the return (which number
must agree with the total shown in the last as held by
existing members).
Number of shares issued subject to payment wholly

in cash
Number of shares issued as fully paid up otherwise

than in cash
Number of shares issued as partly paid up to the

extent of ……… per share otherwise than in cash
†Number of ……….. shares (if any) issued at a

discount
Total amount of discount on the issue of shares which Rs.

has not been written of at the date of this return
‡There has been called up on each of shares Rs.

‡There has been called up on each of Shares Rs.
‡There has been called up on each of Shares Rs.
§Total amount of calls receive, including payments on application
and allotment
*Where there are shares of different kinds or amounts (e.g. Preference and Ordinary or
Rs.10 and Re. 1) state the number and nominal values separately.
†If the shares are of different kinds, state them separately
‡Where various amounts have been called, or there are shares of different
kinds, state them separately.
§Include what has been received on forefeited as well as on existing

shares.
Total amount (if any) agreed to be considered as paid .. Rs

on shares which have been issued as fully paid up
otherwise than in cash
Total amount (if any) agreed to be considered as paid .. Rs.

on shares which have been issued as partly paid up to
the extent of per share otherwise than in cash
.. Rs
Total amount of calls unpaid .
Total amount of the sums (if any) paid by way of .Rs.

commission in respect of any shares or debentures or
allowed by way of discount in respect of any debentures
since the date of the last return
.. Rs.
Total number of shares forfeited
.. Rs.
Total amount paid (if any) on shares forfeited
Total amount of shares for which share warrant .. Rs.

to bearer are outstanding
Total amount of share warrants to bearer issued Issued Rs.

and surrendered respectively since the date of Surrendered Rs.
the last return
Number of shares comprised in each share

warrant to bearer
Total amount of the indebtedness of the .. Rs.

company in respect of all mortgages and
charges of the kind which are required
to be registered with the Registrar under
the Companies Act, 1982
The name and address of the auditor or the names and addresses of the
auditors of the Company at the date of the return.
Certificate and other documents accompanying annual return to be given

by a director and the secretary of every private company.
365 Companies.Act, No. 17 of 1982
We certify that the company has not since, the date of (the incorporation of the company the last
annual return) issued any invitation to the public to subscribe for any shares or debentures of the
company.
(Sgd.) Director.
(Sgd.) Secretary.
FURTHER CERTIFICATE TO BE GIVEN AS AFORESAID IF THE NUMBER OF

MEMBERS OF THE COMPANY EXCEEDS FIFTY
We certify that the excess of the number of members of the company over fifty consist wholly of
persons who, under the provisions of paragraph (b) of subsection (1) of section 30 of the
Companies Act, 1982, are not to be included in reckoning the number of fifty.
(Sgd.) Director.
(Sgd.) Secretary.
DECLARATION TO BE SENT BY PRIVATE COMPANY WITH ANNUAL RETURN

SECTION 122
I/We hereby declare that to the beat of my/our knowledge and belief I/We have done all things by
me/us by or under the Companies Act,1982.
(Sgd.) Directors.
CERTIFIED COPY OF ACCOUNTS
There shall be annexed, in this return a written copy certified by the director and by the secretary
of the company to be a true copy of every balance sheet laid before the company in general
meeting during the period to which the return relates (including every document required by law
to be annexed to the balance sheet) and a copy (certified as aforesaid) of the report of the auditors
on, and of the report of the directors accompanying each, such balance sheet. Where any such
balance sheet as aforesaid or document required by law to be annexed thereto did not comply with
the requirements of the law as in force at the date of the audit with respect to the form of balance
sheets or documents aforesaid, as the case may be, there shall be made such additions to and
corrections in the copy as would have been required to be made in the balance sheet or document
in order to make it comply with the said requirements and the fact that the copy has been so
amended must be stated thereon.
PARTICULARS OF DIRECTORS AND SECRETARIES

Particulars of the Persons who are Directors of the Company
at the date of the Return
Name (in the case Any for- Nation- Usual residential Business
of an individual, mer name ality address (in the case occupa-
present, name or or names of a corporation tion and
names and sur- and the registered or particulars
name. Surname principal office) of other
directors-
ships.
Particulars of tha person, who is secretary of the company at
the date
of this return.
Name (In the case of Anyformer Nationality Usual residential address
an individual, pre- name or names (In the case of a corpora
sent name or names and surnames tion
and surname. In the the registered or principal
case of a corporation, office)
the corporate name)
(Signed) Director
(Signed) Secretary
NOTES
" director" includes any person who occupies the position of a director by whatsoever name called, and any
person in accordance with whose directions or instructions the directors of the company are accustomed to
act;
" name " includes a forename, and " surname" in the case of a person usually known by a title different
from his surname, means that title; and
"former name " and “{ former surname" do not include—
(a) in the case of any person, a former name or surname where that name or surname was changed or
disused before the person bearing that name attained the age of eighteen years or has been changed or
disused for a period of not less than twenty years; or
(b) in the case of a married woman the name or surname by which she was known previous to the
marriage.
The names of all bodies corporate incorporated in Sri Lanka of which the director is also a director, should
be given except bodies corporate of which, the company making the return is the wholly-owned subsidiary
or bodies corporate which are the wholly-owned subsidiaries either of the company or of another company
of which the company is the wholly-owned subsidiary. A body corporate is deemed to be the wholly-
owned subsidiary of another if it has no members except that other and that other's wholly-owned
subsidiaries and its or their nominies. If the space provided in the form is insufficient, particulars of other
directorships should be listed on a separate statement attached to this return.
Where all the partners in a firm are joint secretaries, the name and principal office of the firm may be
stated.
SEVENTH SCHEDULE (Section 159)
MATTERS TO BE EXPRESSLY STATED IN AUDITORS' REPORT
1. Whether they have obtained all the information and explanations which to the best of their knowledge
and belief were necessary for the purposes of their audit.
2. Whether, in their opinion, proper books of account have been kept by the company. So far as appears
from their examination of those books, and proper returns adequate for the purpose of
their audit have been received from branches not visited by them.
3. (1) Whether the company's balance sheet and (unless it is framed as a consolidated profit and loss
account) profit and loss account dealt with by the report are in agreement with. the books of account and
returns.
(2) Whether, in their opinion and to the best of their information and according to the explanations given to
them, the said accounts gives the information required by the Act, in the manner so required and gives a true
and fair view—
(a) in the case of the balance sheet, of the state of the company's affairs as at the end of its financial year ;
and
(b) in the case of profit and loss account, of, the profit or loss for its financial year - or, as
the case may be gives a true and fair view thereof subject to the non-disclosure of any matters (to be
indicated in the report) which by virtue of Part III of the Fifth Schedule are not required to. be disclosed.
4. In the case of a holding company submitting group accounts whether, in their opinion the group accounts
have been properly prepared in accordance with the provisions of the Act as to give a true and fair view of
the state of affairs and profit or loss of the company and its subsidiaries dealt with thereby, so far as
concerns members of the company, or, as the case may be, so as to give a true and fair view thereof subject
to the non-disclosure of any of any matters (to be indicated in the report) which, by virtue of Part III of the
Fifth Schedule are not required to be disclosed.
5. Whether any director of a company is directly or indirectly, interested in a contract with the company and
if so the nature of his interest and any comments they may consider necessary to make in regard to such
contract or interest.
LIST OF PAST AND PRESENT
MEMBERS
List of persons holding shares or stock in the company on the fourteenth day after the annual general meeting for
19 , and of persons who have held shares or stock therein at any time since the date of the last return, or in the
case of the first return, of the incorporation of the company.
Folio in Name Nation Princip Account of Shares Remarks
register s and ality al Number Particulars of shares transferred since
ledger Addre occupa of shares the date of the last return or, in the case
containing sses tion held by of the first return, of the incorporation of

Number† Date of registration of
particulars existing
transfer
(a) (b)
*The aggregate number of shares held by each member must be stated, and the aggregates must be
added.up so as to agree with the number of shares stated in the Summary of Share Capital and Debentures
to have been taken up.
†When the shares are of different classes these columns should be sub-divided so that the number of each
class held, or transferred, may be shown separately. Where any shares have been converted into stock the
amount of stock held by each member must be shown.
†† The date of registration of each transfer should be given as well as the number of shares transferred on
each date. The particulars should be placed opposite the name of the transferor and not opposite that of the
transferee, but the name of the transferee may be inserted in the "Remarks" column immediately opposite
the particulars of each transfer.
Notes
If the names in the list are not arranged in alphabetical order, an index sufficient to enable the name of
any person to be readily found must be annexed.
EIGHTH SCHEDULE (Section 344)
PROVISIONS WHICH DO NOT APPLY IN THE CASE OF A WINDING UP

SUBJECT TO SUPERVISION OF THE COURT
Statement of company's affairs to be submitted to official receiver. (S. 268)
Report by official receiver. (S. 269)
Power of court to appoint liquidator. (S. 270)
Appointment and powers of provisional liquidator. (S.271)
Appointment, style, &c., of liquidators in winding up (S. 272)
Provisions where person other than official receiver is appointed liquidator. (S. 273)
General provisions as to liquidators. (S. 274)
Exercise and control of liquidators' powers. (S.278)
Books to be kept by liquidator. (S. 279)
Payments of liquidator into bank. (S. 280)
Audit of liquidators' accounts. (S. 281)
Control of Registrar of Companies over liquidators. (S. 282)
Release of liquidators. (S. 283)
Meeting of creditors and contributories to determine whether committee of inspection shall be appointed.
(S. 284)
Constitution and proceedings of committee of inspection. (S. 285)
Powers of court where there is no Committee of Inspection (S. 286)
Appointment of special manager. (S. 294)
Power to order public examination of promoters, directors, &c. (S. 300)
Power to restrain fraudulent persons from managing companies. (S. 186)
Delegation to liquidator of certain powers of court. (S. 303)
Power to appoint official receiver as receiver for debenture holder's or creditors. (S. 381)
NINTH SCHEDULE (Section 433)
PROVISION REFERRED TO IN SECTION 433 OF THE ACT
Provisions relating to—
Conclusiveness of certificate of incorporation.

Specific requirements as to particulars in prospectus.
Prohibition of allotment in certain cases unless statement in lieu of prospectus. Return as to allotments
delivered to Registrar.
Registration of charges created by company registered in Sri Lanka.

Duty of company to register charges created by company.
Duty of company to register charges existing on property acquired.
Application of Part III to companies incorporated outside Sri Lanka.
Restrictions on commencement of business.
Application of Parts IV, V, VI and VII.
The particulars as to directors and indebtedness of company.
Statutory meeting and statutory report.
Auditors’ report and right to information and explanation.
Restriction on appointment or advertisement of directors.
Notice by liquidator of his appointment.
Delivery to Registrar of accounts of receivers and managers.
Documents, &c. to be delivered to the Registrar by companies carrying on business in Sri Lanka.
Return to be delivered to Registrar where documents , & c. altered Balance Sheet of company carrying in
business in Sri Lanka. Obligation to state name of company &c.

Sri Lanka Companies Act

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Sri Lanka Companies Act

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What are the requirements for a company's memorandum?

What are the requirements for a company's memorandum?

What are the different types of companies that can be formed based on liability?

What are the different types of companies that can be formed based on liability?

Companies Act, No.

3. (1) The memorandum of every company shall state—

(4) In the case of a company having a share capital—

4. (1) The memorandum of every company shall, in stating the Further

(2) The memorandum of every company shall state the ancillary

(3) Nothing in the provisions of subsection (1) or subsection (2)

or exercised by the company except with the prior sanction of a

5. The memorandum shall bear a stamp of the prescribed value

7. (1) A company may, by special resolution, alter the provisions of

(c) to enlarge or change, the local area of its operations; or

(f) to sell or dispose of the whole or any part of the undertaking

(g) to amalgamate with any other company or body of persons:

Provided that, where an application is made to the court in

(2) An application under the provisions of subsection (1) may be

(4) On an application under the provisions of subsection (1) the

thinks fit, adjourn the proceedings in order that an arrangement may

(5) The debentures entitling the holders to object to alterations of a

(6) In the case of a company which is by virtue of a licence from

(7) Where a company passes a special resolution altering its

(8) Where a company makes default in giving notice or delivering

(9) The validity of an alteration of the provisions of a company's

the memorandum, articles of association signed by the subscribers to for com-

(3) Where an unlimited company or a company limited by

11. Articles shall—

witness the signature of each signatory and affix his seal.

13. The form of— Statutory

(b) the memorandum and articles of association of a company

shall be respectively in accordance with the forms set put in Tables

retain and register them.

(2) From the date of incorporation specified in the certificate of

17. (1) A certificate of incorporation issued by the Registrar in

(2) A statutory declaration by an attorney-at-law engaged in the

(2) On registration of a company under the provisions of

PROVISIONS WITH RESPECT TO NAMES

19. (1) No company shall be registered by a name which— Restriction on

(a) "President", "Presidential" or in the opinion of the Registrar

(b) "Municipal" or "incorporated", or in the opinion of the Registrar

(c) "Co-operative" or "Society"; or

(d) "National", "State" or "Sri Lanka" or in the opinion of the

approval in writing of the Registrar, change its name.

(2) Where through inadvertence of otherwise, a company on its

21. (1) Where it is proved to the satisfaction of the Registrar that

may be registered as a company, with limited liability, without the charitable

privileges and (subject to the other provisions of this section) be

(2) Where it is proved to the satisfaction of the Registrar—

(3) A licence granted under the provisions of this section may be

(4) An association to which a licence is granted under the

(5) A licence granted under the provisions of this section may at

Provided that, before a licence is so revoked, the Registrar shall

(7) Where a licence granted under the provisions of this section to

of revocation or such longer period as the Registrar may in his

GENERAL PROVISIONS WITH RESPECT TO

thereof to the extent as if they respectively had been signed and

into shares or interests shall be treated as a provision for a share

25. (1) Subject to the provisions of section 24 and section 217,