As the business spectrum rises in Sri Lanka. numerous entrepreneurs are gathering in this nation to set their corporate venture. Many investors, whether local or international are flocking into the country with a vision to set a business stronghold.
However, such stronghold askes for a proper company registration process. Company registration form 1 in Sri Lanka is one of such necessary company registration paperwork that an investor must complete and submit online for completing the business incorporating process.
So, do you really have an interest in starting a business in Sri Lanka? If yes, read this article till the end and discover the necessity of company registration form 1 in Sri Lanka. Furthermore, you will have a basic idea on how to register your company and get it started in Sri Lanka. The Department of Registration of Companies is the government organization in Sri Lanka that oversees the registration of businesses. It is a customer friendly government body and are readily available to help you out. The introduction of the e-RoC has brought business registration at our finger-tips. Gone are the days where we had to stand in long queues at the office. Sri Lanka supports innovation and entrepreneurship.
If you are planning to start a small business then there are two most suitable ways to do so. You may start a business under sole proprietorship or you may open a Private Limited Company. Let us consider the difference between these two. If you are new, low on cash then sole proprietorship is most suitable. It gives you more control over the company’s decisions because you’re the boss. Even though there is paperwork involved, setting up business is easy. You need two forms from the Divisional secretariat;
– a business registration form
– a “Grama sewa” certification request form
You must fill these forms and submit them at a nominal fee. Then you will receive the Business registration certificate. The advantage of a sole proprietorship business is that you will enjoy all of the profits. But there are certain areas where you may be at a disadvantage.
The owner will be responsible of all debts, and decision making. Which means there is unlimited liability in the company. It also may be difficult to raise the necessary capital to run the business. Banks will have many concerns in lending money because of the high liability of the company.
The company will cease to exist with the owner’s demise. Anyway, that should not be a cause of concern at such an early stage! Most major businesses started under sole proprietorship. Even if you start off as a sole proprietorship company, later you may change it to a private limited company.
Considering pros & cons of a sole proprietorship some organizations choose to start a Private Limited Company.
The start-up of a Private limited company may be a bit more complicated. We at S & F consulting are equipped with the best team to help you with that. You may contact us for total business solutions.
Let me give you a briefing on the registration of a Private limited company. There are many advantages of starting a business under PLC. Such company needs between 2 -50 shareholders. There is not much restriction in raising capital for the company. It is a separate legal entity & there is limited liability for its owners. The company can continue operations even if the owner passes away. The company cannot issue shares to the public.
As mentioned earlier, setting up a private limited company may pose some challenges. But we recommend starting up a business as a Private Limited Company due to its many advantages. There is much paperwork involved and may take longer to establish. But at the end of the day it is all worth it.
There are several steps in registering a private limited company. We have discussed them in length on our website. There are three forms that you need to fill and submit to the Department of registration of companies.
- Form 1 – Company Registration form
- Form 18 – Consent & certificate of Director
- Form 19 – Consent & certificate of secretary
We will be discussing Form 1 in detail in this article. Form number 1 can be obtained from the Registration of Company office. Or a downloadable form is made available on their website, drc.gov.lk
Form 1 is the company registration form. You should type out information. You will have to pay LKR.4000 + 8% VAT upon submission. The department will not accept hand-written forms. First, You need to provide information about the nature of your business.
Next is the name of the proposed company. For this, you will be able to use the e-RoC. The name you choose for your business should be unique and different than other companies that already exist. You may use the official website drc.gov.lk to check the authenticity of your name. In order to use this service, you first have to register. By entering some basic details, you will get a Login ID & password. The name reservation is valid for 03 months and you are required to make a payment of LKR.2000 + VAT. You will receive an approval number via e-mail for the company name.
Once you have reserved the perfect name for your business, you can add it onto the form. There is a space for you to add your name approval number. Then you should fill in your Registered business address. This should be a valid physical address in Sri Lanka. It must not only be a P.O. Box number.
In accordance with the companies Act. 07 of 2007 you must declare the authenticity of the name. You must certify that your business name is not identical or similar to an existing company.
Next, you need to acknowledge the Articles of association.
In the next column you must mention details of the Directors of your company. You need to provide the directors;
- National Identity Card No. or Passport details
- Residential Address
- E-mail addresses (optional)
Directors should place their signature in front of their details.
Then you will need to provide details of your shareholders.
- Full name
- NIC Numbers
- Number of shares & detail of shares held jointly
- Shareholders signatures
Details of Secretaries;
- Full Name
- Registration Number
For any further inquiry about registration of your company do not hesitate to contact us. We will be pleased to be of assistance.