Imminent Act

February, 21 (LBO) – Every attempt is being made to bring the new companies act into effect from next financial year starting from April 02 making it easier to set up and operate firms, an official said. An advisory committee charged with giving effect to the act met this week to iron out remaining stumbling blocks.

The new law is expected to modernize the legal framework surrounding businesses in Sri Lanka and also make it easier to set up and run business.

Under the current law, around 79 forms needed to be filled set up and operate a business. Now it has been reduce to 28, advisory committee member Nihal Jayawardene said.

The new law was passed by parliament last October but it went through eight amendments and it has to be signed by the speaker and gazetted by the trade minister to be effective.

It is expected to boost mergers and acquisitions activity by legalizing leveraged buyouts.

The law has taken more than 13 years to develop and bring to parliament.

The new act will provide creditor protection for turnarounds, but also speed up liquidations when the company decides to wind up its affaires.

The new companies law would also do away with the concept of par v