In: Share Transfer

Thinking of Selling Your Company or Transferring Ownership in Sri Lanka?

Owning a company is a big responsibility, and there may come a time when you want to sell it or transfer ownership to someone else. This process can be complex, especially in Sri Lanka where there are specific regulations to follow.

This blog post is designed to give you a general overview of ownership transfer for companies in Sri Lanka, and to highlight the importance of seeking professional guidance. Here, we’ll address some key questions you might have:

  • How is a company ownership transfer different from resigning as a director?
  • Can I sell my company to anyone?
  • What are the legalities involved in transferring ownership of a Sri Lankan company?
Sell or Transfer Company

Understanding the Separation: Director vs. Shareholder

In Sri Lanka, a limited liability company is a separate legal entity from its owners (shareholders) and directors. This means you can resign as a director and still remain a shareholder, or vice versa.

  • Directors: They are appointed by the shareholders to manage the day-to-day operations of the company.
  • Shareholders: They are the legal owners of the company and hold its shares as assets. These shares can be transferred to someone else.

Transferring Ownership: Shares and Considerations

Shares of a company in Sri Lanka can be transferred to another person, subject to the country’s laws and regulations. However, there might be additional considerations depending on the buyer:

  • Sri Lankan Citizen: The transfer process is generally straightforward.
  • Non-Sri Lankan Citizen: In this case, the Exchange Control Department’s guidelines may apply, especially if the company’s objectives are specific.

Importance of Legal Expertise: Articles of Association

Every company in Sri Lanka has Articles of Association, which outline the rules governing its internal operations, including share transfer procedures. A lawyer or company secretary can review your company’s Articles to ensure a smooth ownership transfer process.

Need Help with Ownership Transfer in Sri Lanka?

At ASAC, we have extensive experience assisting companies with ownership transfers in Sri Lanka. Our team of legal professionals can guide you through the entire process, ensuring it’s completed efficiently and according to regulations.

Contact ASAC today for a free consultation! We’ll be happy to answer your questions and help you navigate the ownership transfer process for your company.

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Isura Sirisena

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