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Part XVII

468. Amendment of section 255 of the Companies Act

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

(1)

Section 255 of the Companies Act is hereby amended in the definition of “creditor”, by the substitution for the words “claim in accordance with the provisions of section 357 that a debt is owing to that person by the company”, of the words and figures “submit a proof of debt under subsection (2) of section 426 of the Rescue,

Rehabilitation and Insolvency (Corporate and Personal) Act,

No. 12 of 2026”.

(2)

Section 256 of the Companies Act is hereby amended in paragraph (b) of subsectio n (1), by the substitution for the words and figure “under Part XIII;” of the words, and figures

“under Part IX of the Rescue, Rehabilitation and Insolvency

(3)

Section 257 of the Companies Act is hereby amended in paragraph (d) of subsection (1), by the substitution for the words “the liquidation”, of the words and figures “the liquidation of any company in accordance with Part XII of the Rescue, Rehabilitation and Insolvency (Corporate and

Personal) Act, No. 12 of 2026”.

(4)

The following new sections are hereby inserted immediately after section 258 of the Companies Act : –

258a. (1) Where any arrangement or amalgamation or compromise under this

Part involves creditors, an application under section 256 made by –

(a)

all of the directors of the company;

or

"Declaration to be provided by the directors to court, if creditors are involved

Rescue, Rehabilitation and Insolvency

(b)

in the case of a company having more than two directors, a majority of the directors of the company, shall not be entertained by the court unless it is accompanied by a written declaration that meets the conditions in subsection (2).

(2)

The conditions referred to in subsection (1) shall be that the declaration –

(a)

states that –

(i)

the directors making the declaration have made a full inquiry into the affairs of the company; and

(ii)

having done so, those directors have formed the opinion that the company will be able to pay its debts in full within a period not exceeding twelve months after the application is made;

(b)

includes a full statement about the affairs, business, property and financial circumstances of the company –

(i)

showing as at the latest practicable date, and in any event not earlier than ninety days, before the making of the declaration,

(a)

the particulars of its property, including any inventory of stock and the total amount expected to be realised therefrom;

(b)

the debts and other liabilities of the company;

Rescue, Rehabilitation and Insolvency

(c)

the name and address of each of its creditors;

(d)

the encumbrance or encumbrances (if any) held by each creditor; and

(e)

the date on which each encumbrance was created;

(ii)

supported by affidavit by one or more persons who are, as at the date of the statement, directors of the company;

(c)

is made at a meeting of the directors of the company; and

(d)

is made within the twenty one days immediately preceding the date on which the application is made.

(3)

A director making a declaration under subsection (1) without having reasonable grounds for the opinion that the company will be able to pay its debts in full within the period specified in the declaration commits an offence.

258b. This Part shall not apply to any proceedings under the Rescue, Rehabilitation and Insolvency (Corporate and Personal) Act,

No. 12 of 2026.”.

Read on from s 469

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