Companies Act 2007 · As enacted · Part VII · Management and Administration Registered Office
218. Indemnity and insurance
Official English translation. The Sinhala text prevails.
Official translationFrom Department of Government Printing, unchanged
Except as provided for in this section, a company shall not indemnify or directly or indirectly effect insurance for a director or employee of the company or a related company, in respect of any—
liability for any act or omission in his capacity as a director or employee; or
costs incurred by that director or employee in defending or settling any claim or proceeding relating to any such liability.
A company may if expressly authorised by its articles, indemnify a director or employee of the company or a related company, for any costs incurred by him in any proceeding —
that relates to liability for any act or omission in his capacity as a director or employee; and
in which judgment is given in his favour or in which he is acquitted or which is discontinued or in which he is granted relief under section 526.
A company may if expressly authorised by its articles, indemnify a director or employee of the company or a related company in respect of—
liability to any person other than the company or a related company, for any act or omission in his capacity as a director or employee; or
cost incurred by that director or employee in defending or settling any claim or proceeding relating to any such liability, not being criminal liability or in the case of a director, liability in respect of a breach of the duty specified in section 187.
A company may if expressly authorised by its articles and with the prior approval of the board, effect insurance for a director or employee of the company or a related company in respect of—
liability not being criminal liability, for any act or omission in his capacity as a director or employee;
costs incurred by that director or employee in defending or settling any claim or proceeding relating to any such liability; or
costs incurred by that director or employee in defending any criminal proceedings in which he is acquitted.
The board of a company shall ensure that particulars of any indemnity given to or insurance effected for any director or employee of the company or a related company, are forthwith entered in the interests register.
An indemnity given in breach of this section shall be void.
Where insurance is effected for a director or employee of a company or a related company and the provisions of either subsection (4) or subsection (5) have not been complied with, the director or employee shall be personally liable to the company for the cost of effecting the insurance, except to the extent that he proves that it was fair to the company at the time the insurance was effected.
In this section —
“director” includes a former director;
“effect insurance” includes the payment, whether directly or indirectly, the costs of the insurance;
“employee” includes a former employee;
“indemnify” includes relieve or excuse from liability, whether before or after the liability arises and
“indemnity” has a corresponding meaning.
Part VIII
Amalgamations
Part IX
Compromises with Creditors
Part X
Approval of Arrangements, Amalgamations, and Compromises by Court
Part XI
Provisions Relating to Offshore Companies
Part XII
Winding Up
Part XIII
Administrators Appointment of Administrator
Part XIV
Floating Charges
Part XV
Receivers and Managers
Part XVI
Registrar-General of Companies and Registration Appointment of Officers
Part XVII
Application of Act to Existing Companies
Part XVIII
Overseas Companies
Part XIX
Advisory Commission
Part XX
Companies Disputes Board
Part XXI
Offences Miscellaneous Offences
Part XXII
Miscellaneous Prohibition of Partnership with More Than Twenty Members
Part XXIII