Laws
Companies Act 2007
Part XII
s 342

As enactedVersion · As enacted

Contents

Companies Act 2007

Find in this Act

1Short title and date of operation

IIncorporation of Companies and Related Matters Essential Characteristics of Companies

2Legal status and capacity of a company
3Different types of companies
4Method of incorporating a company
5Incorporation of a company
6Requirements as to name
7Restrictions on names
8Change of name
9Public notice of name
10Direction to change name
11Change of name upon change of status of company
12Use of company name and company number
13Contents of articles
14Application of model articles
15Adoption or amendment of articles
16Effect of articles
17Effect of statement of objects in articles
18Right of shareholders to a copy of the articles
19Method of contracting
20Attorneys
21Authority of directors, officers and agents
22No constructive notice
23pre-incorporation contracts may be ratified
24Warranties implied in pre-incorporation contracts
25Failure to ratify
26Authentication of documents by company

IIPrivate Companies

27Articles of a private company
28Company ceasing to be a private company
29Company may become a private company
30Private companies need not keep interests register
31Unanimous agreement of shareholders

IIICompanies Limited by Guarantee

32Application for incorporation of a company limited by guarantee
33Company limited by guarantee must have articles
34Power to dispose with “limited” in the name of charitable and other companies
35Provisions which apply to companies limited by guarantee

IVShares and Debentures Prospectus

36Dating of prospectus
37Specific requirements as to particulars in prospectus
38Expert’s consent to issue of prospectus containing statement by him
39Consent of bank or attorney-at-law or auditor necessary for inclusion of name in prospectus
40Registration of prospectus
41Civil liability for untrue in prospectus
42Criminal liability for untrue statements in a prospectus
43Document containing offer of shares or debentures for sale to be deemed a prospectus
44Interpretation of provisions relating to prospectuses
45Prohibition of allotment unless minimum subscription is received
46Effect of irregular allotment
47Applications for and allotment of shares and debentures
48Construction of reference to offering shares or debentures to the public
49Nature and types of shares
50Initial shares
51Issue of shares
52Consideration for issue of shares
53Pre-emptive rights to new issues
54Method of issuing shares
55Calls on shares
56Distributions
57Solvency test
58Stated capital
59Reduction of stated capital
60Dividends
61Recovery of distributions
62Reduction of shareholder liability to be a distribution
63Company may acquire or redeem its own shares
64Purchase of own shares
65Enforceability of contract to purchase shares
66Meaning of “redeemable”
67Redemption option of company
68Redemption at the option of the shareholder
69Redemption on fixed date
70Restrictions on giving financial assistance
71Transactions not prohibited by section 70
72Restriction on subsidiary holding shares in holding company
73Transfer not to be registered except on production of instrument of transfer
74Transfer by legal representative
75Registration of transfer at the request of transferor
76Notice of refusal to register transfer
77Certification of transfers
78Duties of company with respect to issue of certificates
79Certificate to be evidence of title
80Evidence of grant of probate, &c
81Right of debenture holders and shareholders to inspect register of debenture holders and to have copies of any trust deed
82Directors prohibited from acting as trustees
83Perpetual debentures
84Power to reissue redeemed debentures in certain cases
85Specific performance of contracts to subscribe for debentures

VShareholders and Their Rights and Obligations

86Meaning of “shareholder”
87Liability of shareholder
88Liability for calls
89Shareholders must agree to increase in liability
90Exercise of powers reserved to shareholders
91Exercise of powers by ordinary resolution
92Powers exercised by special resolution
93Shareholder may require company to purchase shares
94Notice requiring purchase
95Purchase by company
96Purchase of shares by third party
97Court may grant exemption
98Court may grant exemption if company is insolvent
99Alteration of s h a r e h o l d e r rights
100Shareholder may require company to purchase shares
101Action not invalid

VIRegistration of Charges Registration of Charges with Registrar

102Registration of charges created by companies registered in Sri Lanka
103Unregistered charges void in certain cases
104Duty of company to register charges existing on property acquired
105Register of charges to be kept by Registrar
106Endorsement of certificate of registration on debentures
107Entries of satisfaction and release
108Rectification of register of charges
109Copies of instruments creating charges to be kept by company
110Company’s register of charges
111Review of Register of charges
112Application of this Part to charges and property to be acquired by an overseas company

VIIManagement and Administration Registered Office

113Registered office of a company
114Change of registered office
115Requirement to change registered office
116Location of company records
117Form of records
118Inspection of records by directors
119Inspection of company records by shareholders
120Public inspection of company records
121Manner of inspection
122Copies of documents
123Company to maintain share register
124Place of share register
125Stamp duties in case of shares registered in a register outside Sri Lanka
126Index of shareholders
127Power to close register
128Power of court to rectify register
129Trusts not to be entered on share register
130Share register to be evidence
131Annual return
132Declaration and certificate to be sent by private company with annual return
133Annual general meeting
134Convening of extraordinary general meeting on requisition
135Length of notice for calling meetings
136Provisions as to meetings and votes
137Power of court to order meeting
138Representation of companies at meetings of other companies and of creditors
139Proxies
140Right to demand a poll
141Voting on a poll
142Circulation of shareholder’s resolutions on requisition
143Special resolutions
144Resolution in lieu of meeting
145Resolutions requiring special notice
146Resolutions passed at adjourned meetings
147Minutes of proceedings of meetings of shareholders and directors
148Duty to keep accounting records
149Place where accounting records are kept
150Obligation to prepare financial statements
151Contents and form of financial statements
152Obligation to prepare group financial statements
153Contents and form of group financial statements
154Appointment of auditor
155Auditor’s fees and expenses
156Appointment of partnership as auditor
157Qualifications of auditors
158Automatic re-appointment
159Appointment of first auditor
160Replacement of auditor
161Statement by person ceasing to hold office as auditor
162Auditor to avoid conflict of interest
163Auditor’s report
164Auditor’s access to information
165Auditor’s attendance at shareholders’ meeting
166Obligation to prepare annual report
167Sending of annual report to shareholders
168Contents of annual report
169Failure to send reports &
170Registration of financial statements
171Balance sheet date
172Investigation of company’s affairs on application of shareholders
173Investigation of company’s affairs in other cases
174Power of inspectors to carry out investigation into affairs of related companies
175Production of documents and evidence at investigation
176Inspector’s report
177Proceedings on inspector’s report
178Expenses of investigation of company’s affairs
179Inspector’s report to be evidence
180Appointment and powers of inspectors to investigate ownership of company
181Power to require information as to persons interested in shares or debentures
182Power to impose restrictions on shares or debentures
183Registrar’s powers to verify assets and liabilities
184Management of company
185Major transactions
186Delegation of powers
187Duty of directors to act in good faith and in the interests of company
188Directors to comply with Act and company’s articles
189Directors standard of care
190Use of information and advice
191Meaning of “interested”
192Disclosure of interest
193Avoidance of transaction
194Effect on third parties
195Non-application of sections 192 and 193 in certain cases
196Interested director may vote
197Use of company information
198Meaning of “relevant interest”
199Relevant interests to be disregarded in certain cases
200Disclosure of share dealing by directors
201Number of directors
202Qualification of directors
203Director’s consent required
204Appointment of first and subsequent directors
205Appointment of directors to be voted on individually
206Removal of directors
207Director ceasing to hold office
208Resignation of last remaining director
209Validity of director’s acts
210Age limit for directors
211(1) Nothing in section 210 shall prevent the appointment of a director who has attained the age of seventy years, or require a director who...
212(1) Any person who is appointed or to his knowledge is proposed to be appointed director of a company at a time when he has attained the ag...
213Persons prohibited from managing companies
214Court may disqualify directors
215Proceedings of board
216Remuneration and other benefits
217Restrictions on loans to directors
218Indemnity and insurance
219Duty of directors on insolvency
220Duty of directors on serious loss of capital
221Secretary
222Qualifications of secretary to be prescribed
223Register of directors and secretaries
224Oppression
225Mis-management
226Who may make an application
227Power of court to act under section 224 or section 225 during winding up proceedings
228Powers of court on application under section 224 or section 225
229Effect of alteration of articles of company by order under section 224 or 225
230Addition of respondents to application under section 224 or section 225
231Consequences of termination or modification of certain agreements
232Extended meaning of “shareholder”
233Restraining orders
234Derivative actions
235Costs of derivative action to be met by company
236Powers of court where leave is granted
237Compromise, settlement or continuance of derivative action
238Ratification of certain actions of directors

VIIIAmalgamations

239Amalgamations
240Amalgamation proposal
241Approval of amalgamation proposal
242Short form amalgamation
243Registration of amalgamation proposal
244Certificate of amalgamation
245Effect of certificate of amalgamation
246Power to acquire shares of shareholders dissenting from scheme or contract approved by majority

IXCompromises with Creditors

247Interpretation
248Compromise proposal
249Notice of proposed compromise
250Effect of compromise
251Variation of compromise
252Powers of court
253Effect of compromise in liquidation of a company
254Costs of compromise

XApproval of Arrangements, Amalgamations, and Compromises by Court

255Interpretation
256Court approval of arrangements, amalgamation and compromises
257Court may make additional orders
258Application of Part VIII
259Application of section 253 to compromise approved under this Part

XIProvisions Relating to Offshore Companies

260Interpretation
261Company incorporated for business outside Sri Lanka
262Grant of certificate of registration to off-shore company
263Continuation of business of off-shore company
264Prohibition on carrying on business in Sri Lanka
265Cessation of business as an off-shore company

XIIWinding Up

266Definition of contributory
267Modes of winding up
268Power of liquidator to enforce liability of share holders and former shareholders
269Liability of former shareholders for unpaid calls
270Circumstance in which a company may be wound up by the court
271Definition of inability to pay debts
272Application for winding up
273Powers of court on hearing petition
274Power to stay or restrain proceedings against a company
275Avoidance of disposition of property &c. after commencement of winding-up
276Avoidance of attachments &c
277Commencement of winding up by the court
278Copy of order to be forwarded to Registrar
279Actions stayed on winding up
280Effect of winding up order
281Official receiver
282Appointment of official receiver by court in certain cases
283Statement of company’s affairs to be submitted to official receiver
284Report by official receiver
285Power of court to appoint liquidators
286Appointment and powers of provisional liquidator
287Appointment style, &c. of liquidators
288Provisions where person other than official receiver is appointed a liquidator
289General provisions as to liquidators
290Custody of company’s property
291Vesting of property of company in liquidator
292Powers of liquidator
293Exercise and control of liquidator’s powers
294Books to be kept by liquidators
295Payments by liquidator into bank
296Audit of liquidator’s accounts
297Control of Registrar over liquidator
298Release of liquidators
299Meetings of creditors and contributories to determine whether committee of inspections shall be appointed
300Constitution and proceedings of committee of inspection
301Powers of court where there is no committee of inspection
302Power to stay winding up
303Settlement of list of contributories and application of assets
304Delivery of property to liquidator
305Payment of debts due by contributory to company and extent to which set off is allowed
306Payment into bank of moneys due to company
307Appointment of special manager
308Inspection of books by creditors and contributories
309Power to order costs of winding up to be paid out of assets
310Power to summon persons suspected of having property of company
311Power to order public examination of promoters, directors &c
312Person or officer being examined to be represented by an attorney-at-law, &c,
313Power to arrest absconding contributory
314Powers of court cumulative
315Delegation to liquidator of certain powers of court
316Dissolution of a company
317Manner of enforcing order of court
318Enforcement of winding up order in another court
319Circumstances in which a company may be wound up voluntarily
320Notice of resolution to wind up voluntarily
321Commencement of voluntary winding up
322Effect of voluntary winding up on business and status of company
323Avoidance of transfers, &c., after commencement of voluntary
324Statutory declaration of solvency in case of proposal to wind up voluntarily
325Provisions relating to a shareholders’ voluntary winding up
326Power of company to appoint and fix remuneration of liquidators
327Power to fill vacancy in office of liquidator
328Power of liquidator to accept shares &c. in consideration for sale of property of company
329Duty of liquidators to call creditiors’ meeting in case of insolvency
330Duty of liquidator to call general meeting at end of each year
331Final meeting and dissolution
332Alternative provision as to annual and final meetings in case of insolvency
333Provisions applicable to a creditors’ winding up
334Meeting of creditors
335Appointment of liquidator
336Appointment of committee of inspection
337Fixing of liquidators’ remuneration and ceasing of directors’ powers
338Power to fill vacancy in office of liquidator
339Application of section 328 to a creditors’ voluntary winding up
340Duty of liquidator to call meetings of company and of creditors at end of each year
341Final meeting and dissolution
342Provisions applicable to every voluntary winding up
343Distribution of property of company
344Powers and duties of liquidator in voluntary winding up
345Power of court to appoint and remove liquidator in voluntary winding up
346Notice by liquidator of his appointment
347Arrangement when binding on creditors
348Power to apply to court to have question determined or powers exercised
349Costs of voluntary winding up
350Saving for rights of creditors and contributories
351Power to order winding up subject to supervision
352Effect of petition for winding up subject to supervision
353Applications of section 275 and 276 to winding up subject to supervision
354Power of court to appoint or remove liquidators
355Effect of supervision order
356Admissible claims
357Claims by unsecured creditors
358Rights and duties of secured creditors
359Ascertainment of amount of claim
360Claim not of an ascertained amount
361Fines, penalties, or recoveries
362Claims relating to debts payable after commencement of winding up
363Mutual credit and set-off
364Interest on claims
365Preferential claims
366Claims of other creditors and distribution of surplus assets
367Transactions having preferential effect
368Voidable charge
369Uncommercial transactions
370Procedure for setting aside voidable transactions and charges
371Other orders
372Additional provisions relating to setting aside of transactions and charges
373Interpretation in relation to preferences &
374Fraud &c. in anticipation of winding up
375Fraudulent trading
376Power of court to require persons to repay money or return property
377Disclaimer of onerous property
378Restriction of rights of creditor as to execution or attachment in case of company
379Duty of fiscal as to goods taken in execution
380Offences by officers of companies in liquidation
381Liability where proper accounts are not kept
382Prosecution of delinquent officers and members of the company
383Qualifications of liquidators
384Corrupt inducement affecting appointment as liquidator
385Enforcement of duty of liquidator to make returns, &c.,
386Notification that a company is in liquidation
387Exemption of certain documents from stamp duty on winding up of companies
388Books of company to be evidence
389Disposal of books and papers of the company
390Information as to pending liquidation
391Resolutions passed at adjourned meetings of creditors and contributories
392Meetings to ascertain wishes of creditors or contributories
393Power of court to declare dissolution of company void
394Registrar may strike off defunct company from register
395Property of dissolved company to vest in the State
396Establishment of Companies Liquation Account
397Payments into and out of Companies Liquidation Account
398Refusal to supply essential services prohibited
399Rules and fees for winding up

XIIIAdministrators Appointment of Administrator

400Interpretation
401Power of board to appoint administrator
402Notice to charge holders of appointment of administrator
403Effect of appointment of administrator
404Duty of administrator to summon initial meeting
405Effect of confirmation of administrator
406Statement of proposals
407Consideration of proposals by creditors’ meeting
408Consequential orders where administrator cease to hold office
409Approval of substantial revisions to proposals
410Notice of appointment of administrator
411Notice of administration
412Qualifications of administrator
413Validity of acts of administrator
414Consent to be appointmented
415Vacancy in office of administrator
416Powers of administrators
417Power to deal with charged property &c.,
418General duties of administrator
419Discharge of administrator or variation of resolution appointing administrator
420Remuneration and expenses of administrator
421Liability of administrator
422Relief from liability
423Obligations of company and directors to provide information &c
424Creditors’ committee
425Protection of interests of creditors and share holders
426Application to administrator of provisions relating to receivers

XIVFloating Charges

427Company may grant floating charge
428Instrument creating floating charge
429Provisions of instrument creating floating charge
430Dealing with property subject to floating charge before attachment
431Ranking of floating charges
432Alteration and discharge of floating charges
433Circumstances in which floating charge attaches to property

XVReceivers and Managers

434Interpretation
435Instrument may confer power to appoint receiver
436Qualifications of receivers
437Appointment of receiver under an instrument
438Extent of power to appoint a receiver
439Court may appoint a receiver
440Notice of appointment of receiver
441Notice of receivership
442Vacancy in office of receiver
443Powers of receivers
444Precedence among receivers
445Power to make calls on shares
446Execution of documents
447Obligations of company and directors
448Validity of acts of receivers
449Consent of mortgagee to sale of property
450General duties of receivers
451Duty of receiver selling property
452No defence or indemnity
453Duty in relation to money
454Accounting records
455First report by receivers
456Further reports by receiver
457Extension of time for preparing reports
458Persons entitled to receive reports
459Persons entitled to inspect reports
460Duty to notify breaches of any provisions of this Act
461Notice of end of receivership
462Preferential claims
463Powers of receiver on liquidation
464Liability of receiver
465Relief from liability
466Court supervision of receivers
467Court may terminate or limit receivership
468Orders to enforce receiver’s duties
469Orders protecting property in receivership
470Refusal to supply essential services prohibited

XVIRegistrar-General of Companies and Registration Appointment of Officers

471Appointment of officers
472Appeals from Registrar’s decisions
473Registers to be kept
474Authentication of documents by seal
475Registration of documents, copies of documents, notices &c
476Translations of documents filed
477Fees
478Recovery of expenses and fees
479Fund
480Inspection, production and evidence of documents kept by Registrar
481Enforcement of duty of company to make returns to Registrar
482Unlawful disclosure of information relating to companies
483Production and inspection of books where an offence is suspected
484Registrar’s power to call for information and to inspect books, registers and documents

XVIIApplication of Act to Existing Companies

485Application of Act to existing companies
486Provisions relating to articles of existing companies
487Provisions relating to company numbers of existing companies &c

XVIIIOverseas Companies

488Interpretation
489Documents and particulars to be delivered to Registrar by overseas companies
490Power of overseas companies to hold lands
491Return to be delivered to Registrar where documents &c. altered
492Financial statements of overseas company
493Name of overseas company
494Obligation to state name and particulars of company
495Service on overseas company
496Registrar to be notified when company ceases to have place of business in Sri Lanka
497Liquidation of assets in Sri Lanka of overseas company
498Penalties for non-compliance
499Enforcement of duty to comply with provisions of this Part
500Dating of prospectus and particulars to be contained therein
501Provisions as to expert’s consent and allotment
502Registration of prospectus
503Penalty for contravention of section 500, section 501 or section 502
504Civil liability for misstatements in prospectus
505Interpretation of provisions as to prospectuses

XIXAdvisory Commission

506Appointment &c. of Advisory Commission

XXCompanies Disputes Board

507Companies Disputes Board
508Board members may mediate disputes
509Privilege in respect of mediations proceeding
510Fees payable in respect of mediation

XXIOffences Miscellaneous Offences

511Penalty for false statement
512Penalty for falsification of records
513Penalty for improper use of word “Limited”
514Compounding of certain offences
515Offences summarily triable
516Imposition and application of fines
517Savings as to private prosecutors
518Savings for privileged communications

XXIIMiscellaneous Prohibition of Partnership with More Than Twenty Members

519Prohibition of partnership with more than twenty members
520Procedure
521Grant of isnterim relief
522Savings for attorney-at-law and bankers
523Service of documents on company
524Documents to be received in evidence
525Costs in action by certain limited companies
526Power of court to grant relief in certain cases
527Regulations
528Sinhala text to prevail in case of inconsistency
529Interpretation
530Transitional provisions
531Savings
532Savings of pending proceedings for winding up

XXIIIRepeals and Amendments

533(1) The Companies Act…
534The First Schedule to the High Court of the

Schedules

FIRST SCHEDULE [Section 14] MODEL ARTICLES A. SHARES 1. Issue of shares (1) Subject to articles 1 (2) and 1 (3), of these articles, the boa...
Second Schedule [Section 31 (1)] Provisions Which Do Not Apply to Private Companies Acting with Unanimous Shareholder Approval Section 52 (...
THIRD SCHEDULE [Section 35 (1)] PROVISIONS WHICH DO NOT APPLY TO COMPANIES LIMITED BY GUARANTEE Part IV (Shares and Debentures) Sections 93...
Fourth Schedule [Section 37(1)] Matters to Be Specified in Prospectus and Reports to Be Set Out Therein Part 1 Matters to Be Specified 1. T...
FIFTH SCHEDULE [Section 131] MATTERS TO BE INCLUDED IN ANNUAL RETURN The following matters shall be included in the annual return of a comp...
Sixth Schedule [Section 186] Provisions Which Confer Powers on Board Which May Not Be Delegated Section 51 (Issue of Shares) Section 52 (Co...
SEVENTH SCHEDULE [Section 249(2)] PROCEEDINGS AT MEETINGS OF CREDITORS 1. Methods of holding meetings A meeting of creditors may be held— (...
Eighth Schedule [Section 355 (2)] Provisions Which Do Not Apply in the Case of a Winding Up Subject to Supervision of the Court Section 283...
NINTH SCHEDULE [Section 365 (2)] PREFERENTIAL CLAIMS 1. The liquidator shall first pay, in the order of priority in which they are listed:—...
TENTH SCHEDULE [Section 366 (5)] PAYMENT OF CLAIMS IN LIQUIDATION 1. The liquidator may from time to time distribute such amount of the fun...
ELEVENTH SCHEDULE [Section 429 (1)] TERMS IMPLIED IN INSTRUMENTS CREATING FLOATING CHARGES 1. The company shall not sell or otherwise dispo...
TWELFTH SCHEDULE [Section 443 (2)] POWERS OF RECEIVERS 1. Every receiver appointed under Part XV shall, subject to the instrument or the or...

Companies Act 2007 · As enacted · Part XII · Winding Up

342. Provisions applicable to every voluntary winding up

Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.

Official translationFrom Department of Government Printing, unchanged

The provisions of sections 343 to 350 (both inclusive) shall apply to every voluntary winding up, whether a shareholders’ or a creditors’ winding up.

Read on from s 343

Part XIII

Administrators Appointment of Administrator

Read on from Part XIII

Part XIV

Floating Charges

Read on from Part XIV

Part XV

Receivers and Managers

Read on from Part XV

Part XVI

Registrar-General of Companies and Registration Appointment of Officers

Read on from Part XVI

Part XVII

Application of Act to Existing Companies

Read on from Part XVII

Part XVIII

Overseas Companies

Read on from Part XVIII

Part XIX

Advisory Commission

Read on from Part XIX

Part XX

Companies Disputes Board

Read on from Part XX

Part XXI

Offences Miscellaneous Offences

Read on from Part XXI

Part XXII

Miscellaneous Prohibition of Partnership with More Than Twenty Members

Read on from Part XXII

Part XXIII

Repeals and Amendments

Read on from Part XXIII

Schedules

Details

Companies Act 2007 · s 342

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Where this comes from

Department of Government Printing · Companies Act 2007, As enacted. We last updated this text on 9 Oct 2026.

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