As enacted

Contents

Companies Act 2007 · As enacted · Part VII · Management and Administration Registered Office

216. Remuneration and other benefits

Official English translation. The Sinhala text prevails. Open the official Sinhala text, official PDF on documents.gov.lk

(1)

Subject to the provisions of section 217, the board of a company may, if authorised to do so by the articles or by an ordinary resolution, approve—

(a)

the payment of any remuneration or the provision of other benefits by the company to a director for services as a director or in any other capacity;

(b)

the payment by the company to a director or former director, of compensation for loss of office;

(c)

the entering into of a contract to do any one of the things referred to in paragraphs (a) or (b), if the board is satisfied that to do so is fair to the company.

(2)

The board shall ensure that forthwith after approving the making of the payment or the provision of the benefit or the entering into of the contract, as the case may be, particulars of the payment or benefit or contract are entered in the interests register.

(3)

The payment of remuneration or the giving of any other benefit to a director in accordance with a contract authorised under subsection (1), shall not be required to be separately authorised under that subsection.

(4)

The directors who vote in favour of approving a payment, benefit, or contact under subsection (1), shall sign a certificate stating that in their opinion, the making of the payment or the provision of the benefit or the entering into of the contract is fair to the company, and the reasons for reaching that opinion.

(5)

Where a payment is made or other benefit provided to which subsection (1) applies, and either—

(a)

the provision of subsections (1) and (4) have not been complied with ; or

(b)

reasonable grounds did not exist for the opinion set out in the certificate given under subsection (4), the director or former director to whom the payment is made or the benefit is provided, shall be personally liable to the company for the amount of the payment or the monetary value of the benefit, except to the extent to which he proves that the payment or benefit was fair to the company at the time it was made or provided.

(6)

Nothing in this section shall prevent the articles of a company from providing for the authorisation by shareholders of payment of remuneration or the giving of other benefits to directors, and the provisions of subsections (1) to (5) of this section shall not apply to the payment of remuneration or the giving of any other benefit approved by shareholders pursuant to such a provision in the company’s articles.

Read on from s 217

Part VIII