If you run a company in Sri Lanka, you have probably been told you need a qualified company secretary. But does that really apply to your business — including a small private limited company? The short answer is: yes, it almost certainly does.
This guide explains exactly what the law requires, what changed in 2023, and what the consequences are if your company secretary does not meet the current legal standard.
The Legal Requirement: Section 222 of the Companies Act No. 7 of 2007
Section 222 of the Companies Act No. 7 of 2007 states that the secretary of every company with a turnover or stated capital above a prescribed threshold must hold such qualifications as are prescribed by regulation.
The threshold is deliberately low. It applies to any company with:
- A stated capital of Rs. 500,000 or more, or
- An annual turnover of Rs. 1,000,000 or more
This captures the vast majority of active private limited companies in Sri Lanka — not just large corporates. If your company meets either condition, a qualified company secretary is not optional. It is a legal requirement.
What Changed in 2023: The New Regulations You Must Know About
The qualification requirements are now governed by the Companies (Secretaries) Regulations, No. 1 of 2023, published in Gazette Extraordinary No. 2323/41 on 17 March 2023. These Regulations were made by the Minister of Industries under Section 527 read with Section 222 of the Companies Act.
The 1987 Regulations (Gazette No. 471/6) have been rescinded. They no longer apply. If you have been relying on advice or articles based on the old 1987 framework — including references to a 20-year experience pathway or the old list of qualifying bodies — that information is out of date.
⚠️ Important: Any act required by law to be performed by a company secretary, if performed by a person who does not hold a valid Certificate of Practice under the 2023 Regulations, shall be invalid. — Regulation 14, Companies (Secretaries) Regulations No. 1 of 2023
Who Qualifies as a Company Secretary Under the 2023 Regulations?
Individual Persons
Under Regulation 3(1), an individual may only act as company secretary if they are:
- Above 18 years of age
- A citizen of Sri Lanka
- A holder of a Certificate of Practice issued by the Registrar of Companies, and
- An Attorney-at-Law of the Supreme Court of Sri Lanka, or a member of one of the following recognised bodies:
- Institute of Chartered Accountants of Sri Lanka (ICASL)
- Institute of Chartered Corporate Secretaries of Sri Lanka (ICCSSL)
- Chartered Institute of Management Accountants of the United Kingdom (CIMA UK)
- Institute of Certified Management Accountants of Sri Lanka (ICMASL)
- Chartered Governance Institute of the United Kingdom and Ireland (CGI)
Body Corporates (Companies Acting as Secretary)
Under Regulation 3(2), a company may act as secretary to another company, provided it:
- Is incorporated in Sri Lanka
- Has Articles of Association that specifically state it is engaged in company secretarial practice
- Has a majority of its shareholding held by Sri Lankan citizens
- Has at least one director who holds a Certificate of Practice
Firms (Sole Proprietorships and Partnerships)
Under Regulation 3(3), a sole proprietorship must hold a Business Registration Certificate noting secretarial practice, and the sole proprietor must be a Sri Lankan citizen holding a Certificate of Practice. For a partnership, every partner must hold a Certificate of Practice.
What Is a Certificate of Practice — and How Is It Obtained?
A Certificate of Practice (COP) is a practising licence issued by the Registrar of Companies to a qualified individual. Under Regulation 5(1), no person may act as company secretary without holding a valid COP.
Key facts about the Certificate of Practice:
- Applications are made online through the Department of Registrar of Companies website
- Applicants must demonstrate completion of a Continued Professional Development (CPD) programme of not less than 10 hours in company secretarial work
- The non-refundable application fee is Rs. 10,000
- A COP is valid until 31 December of the year following the year it was issued
- Renewal applications must be submitted on or before 1 November each year (renewal fee: Rs. 2,500 for individuals, Rs. 5,000 for others)
- The Registrar publishes a list of all COP holders on the official website by 31 March each year
Can a Director Be Appointed as Company Secretary?
Yes. Section 218 of the Companies Act still permits a director of a company to be appointed as its secretary, with one exception: a sole director cannot also be the sole secretary.
However, this does not exempt that director from the 2023 Regulations. If a director is appointed as secretary, they must still hold a valid Certificate of Practice. The Regulations apply to any person acting as secretary — including directors. Appointment under Section 218 alone is not sufficient.
This is a common misunderstanding. Many directors and accountants assume that because a director can legally be appointed secretary, no further qualification is needed. That assumption was incorrect even before 2023, and the new Regulations make it unambiguously clear.
What Happens if Your Company Secretary Is Not Qualified?
The consequences are serious. Regulation 14 of the 2023 Regulations states:
“Any act required by law to be performed by a secretary to a company, if purported to be performed by a person who does not hold a valid Certificate of Practice issued under these regulations, shall be invalid.”
In practical terms, this means:
- Annual Returns signed by an unqualified secretary are invalid filings
- Certified true copies of documents issued by an unqualified secretary have no legal standing
- Resolutions recorded by an unqualified secretary may be challenged or voided
- Your company’s statutory compliance record could be considered incomplete, attracting penalties from the Registrar of Companies
This is not a technicality. Banks, investors, and government agencies rely on properly certified company documents. An invalid certification can delay or derail loan approvals, share transfers, tenders, and regulatory filings.
Why a Qualified Company Secretary Matters Beyond the Legal Requirement
The legal requirement aside, there are strong practical reasons to appoint a professionally qualified company secretary:
- Statutory filings — Annual Returns, share allotment filings, director change notifications — require precise knowledge of current law and eROC procedures
- Board and shareholder resolutions must meet exact legal standards to be valid; a poorly drafted resolution can create governance disputes
- Articles of Association amendments require a correct special resolution and proper filing with the Registrar
- Document certification by a qualified, registered secretary carries legal weight that banks, courts, and government bodies will accept
- Risk management — a qualified secretary will flag compliance gaps before they become penalties
- Company growth — as your business scales, the complexity of your corporate compliance obligations grows with it
Frequently Asked Questions
Does a private limited company in Sri Lanka need a qualified company secretary?
Yes, if the company has a stated capital of Rs. 500,000 or more, or an annual turnover of Rs. 1,000,000 or more. These thresholds cover the vast majority of active private limited companies in Sri Lanka. The requirement is set out in Section 222 of the Companies Act No. 7 of 2007 and the Companies (Secretaries) Regulations No. 1 of 2023.
What is a Certificate of Practice for a company secretary in Sri Lanka?
A Certificate of Practice (COP) is a practising licence issued by the Registrar of Companies to a qualified individual. Under Regulation 5(1) of the 2023 Regulations, no person may act as company secretary without a valid COP. It must be renewed annually before 1 November each year.
Can a director be the company secretary in Sri Lanka?
Yes, Section 218 of the Companies Act permits a director to be appointed as secretary, except where that person is the sole director. However, that director must still hold a valid Certificate of Practice under the 2023 Regulations. Appointment as director does not substitute for the qualification requirement.
What are the consequences of having an unqualified company secretary?
Under Regulation 14 of the Companies (Secretaries) Regulations No. 1 of 2023, any act required by law to be performed by a secretary, if performed by a person without a valid Certificate of Practice, is invalid. This includes Annual Return filings, document certifications, and resolutions.
Which professional qualifications are accepted for company secretaries in Sri Lanka in 2025?
Under the 2023 Regulations, accepted qualifications include membership of ICASL, ICCSSL, CIMA UK, ICMASL, or CGI (UK and Ireland), or being an Attorney-at-Law of the Supreme Court of Sri Lanka. All qualifying individuals must also hold a Certificate of Practice issued by the Registrar of Companies.
Is the 1987 Company Secretary Gazette still valid in Sri Lanka?
No. The Companies (Secretaries) Regulations 1987 (Gazette No. 471/6 of 14 September 1987) were rescinded by the Companies (Secretaries) Regulations No. 1 of 2023, which came into operation on 17 March 2023. The 2023 Regulations are the current applicable law.
![Sole proprietorship vs Pvt Ltd Sri Lanka — this is one of the most common questions first-time entrepreneurs ask. Both structures let you run a legal business. However, they are very different in terms of liability, credibility, tax, and growth potential. This guide compares both business structures clearly and simply. By the end, you will know exactly which one suits your situation — and what steps to take next. Sole Proprietorship vs Pvt Ltd Sri Lanka: What Is the Difference? The biggest difference is legal identity. A sole proprietorship is not a separate legal entity from its owner. You and your business are the same person in the eyes of the law. As a result, you carry full personal liability for every debt and obligation your business creates. A Private Limited Company (Pvt Ltd), on the other hand, is a separate legal entity. It exists independently from its owners. Furthermore, shareholders are only liable up to the value of their shares. As a result, your personal assets stay protected if the business runs into trouble. This one difference — personal liability vs limited liability — drives almost every other comparison between sole proprietorship vs Pvt Ltd Sri Lanka. What Is a Sole Proprietorship in Sri Lanka? A sole proprietorship is the simplest business structure available in Sri Lanka. One person owns and runs the business. Furthermore, that person takes full responsibility for everything the business does. How to register. Sole proprietorships register at the local Divisional Secretariat — not through the eROC portal. Registration fees are very low. However, the process requires an in-person visit to the Divisional Secretariat. You cannot register online. Who can register. Only Sri Lankan citizens and permanent residents can register a sole proprietorship. Foreign nationals cannot. Instead, they must register a Private Limited Company through the Department of the Registrar of Companies. Liability. The owner carries unlimited personal liability. If the business cannot pay its debts, creditors can go after your personal savings, property, and other assets. Tax. Sole proprietors pay personal income tax on all business profits. There is no separation between business and personal income for tax purposes. Bank accounts. Most banks in Sri Lanka do not offer full business banking facilities to sole proprietorships. As a result, accessing loans, trade finance, or business credit cards is much harder. Compliance. Ongoing compliance requirements are minimal. There is no Annual Return to file, no board resolutions required, and no Company Secretary needed. What Is a Private Limited Company (Pvt Ltd) in Sri Lanka? A Private Limited Company is a separate legal entity registered under the Companies Act No. 07 of 2007. It is the most popular business structure in Sri Lanka for startups, SMEs, and foreign investors. How to register. Pvt Ltd companies register through the eROC portal operated by the Department of the Registrar of Companies. The entire process is online. Furthermore, ASAC can complete the registration on your behalf remotely. Read our full company registration guide here. Who can register. Both Sri Lankan nationals and foreign investors can register a Pvt Ltd company. Moreover, 100% foreign ownership is permitted in most sectors. Liability. Shareholders carry limited liability only. Your personal assets are protected from business debts. As a result, the company's financial risk stays separate from your personal finances. Tax. Pvt Ltd companies pay Corporate Income Tax on profits. Furthermore, companies have access to certain tax incentives and deductions not available to sole proprietors. Bank accounts. Banks treat Pvt Ltd companies as proper business entities. As a result, they offer full corporate banking facilities — including business loans, trade finance, overdrafts, and corporate credit cards. Compliance. Pvt Ltd companies must meet ongoing compliance requirements. These include filing an Annual Return (Form 15) every year, maintaining statutory registers, holding AGMs, and appointing a licensed Company Secretary. However, ASAC manages all of this for our clients year-round. Sole Proprietorship vs Pvt Ltd Sri Lanka: Key Differences Compared Here is a clear side-by-side comparison of sole proprietorship vs Pvt Ltd Sri Lanka. FeatureSole ProprietorshipPrivate Limited CompanyLegal identityNo — owner and business are the sameYes — separate legal entityPersonal liabilityUnlimitedLimited to share valueWho can registerSri Lankan citizens and PRs onlyAnyone — including foreignersRegistration authorityDivisional SecretariatDepartment of Registrar of Companies via eROCOnline registrationNoYes — fully onlineMinimum directorsN/A1Company Secretary requiredNoYes — legally mandatoryCorporate bank accountLimited accessFull accessForeign ownershipNot permittedPermitted in most sectorsAnnual Return requiredNoYes — within 18 months, then annuallyCredibility with clientsLowerHigherAccess to investmentVery limitedGood — can take on shareholdersCost to registerVery lowModerateOngoing compliance costVery lowModerate Which Is Right for Your Business? The answer depends on your situation. Furthermore, it depends on where you want your business to go in the next few years. Choose a sole proprietorship if: You are testing a business idea with very low risk You operate a small, local, cash-based business You are a Sri Lankan national or permanent resident You want the absolute minimum in compliance and cost You do not plan to take on investors or partners Choose a Pvt Ltd company if: You want to protect your personal assets from business risk You plan to grow, scale, or take on investment You want to open a proper corporate bank account You are a foreign national investing in Sri Lanka You want to build credibility with clients, banks, and partners You plan to apply for government contracts or tenders You intend to hire employees and manage payroll properly For most serious entrepreneurs — local or foreign — a Private Limited Company is the right choice. The cost of registration is modest. Moreover, the protection, credibility, and growth potential it provides far outweigh the additional compliance obligations. How to Register Each Business Type Registering a sole proprietorship: Visit your local Divisional Secretariat in person Submit your application form and supporting documents Pay the registration fee — typically a few hundred rupees Receive your Certificate of Registration of Business Name Display the certificate at your business premises Registering a Pvt Ltd company: Check name availability on the eROC portal Reserve your preferred company name Prepare Form 1, Form 18, Form 19, and Articles of Association Upload all documents through eROC in PDF format Pay government registration fees online Await Registrar approval — typically 5 to 7 business days Download your Certificate of Incorporation ASAC manages every step of Pvt Ltd registration for you. Furthermore, we act as your Company Secretary from day one. Contact us to start your registration here. Sole Proprietorship vs Pvt Ltd Sri Lanka: Cost Comparison Sole proprietorship costs: Registration fee: A few hundred rupees at the Divisional Secretariat Ongoing compliance: Minimal — no Annual Return, no Company Secretary required Total annual cost: Very low Pvt Ltd company costs: Government registration fees: Published on the Department of Registrar of Companies website Professional service fees: Depend on your specific situation — ASAC provides a clear quote after a short consultation Annual company secretarial retainer: Covers Annual Return filing, board resolutions, and ongoing compliance Total annual cost: Higher than a sole proprietorship but manageable — and worth every rupee for the protection and credibility it provides The real cost of a sole proprietorship is not what you pay to register. It is what you risk by having no limited liability protection. Furthermore, it is the business opportunities you miss because you lack corporate credibility. Can You Convert a Sole Proprietorship to a Pvt Ltd Company? Yes. Many business owners start as sole proprietors and convert to a Pvt Ltd company as they grow. However, conversion is not automatic. You need to register a new Private Limited Company through eROC. Furthermore, you must transfer your business activities, contracts, and assets to the new company. The good news is that your existing business name may be available for registration as a company name — provided no other company has already registered it. Check availability on the eROC name search before you start. ASAC manages the conversion process for clients who want to upgrade from sole proprietorship to Pvt Ltd. Book a call with our team below to discuss your options. Common Mistakes When Choosing a Business Structure Choosing a sole proprietorship because it is cheaper. The registration cost is lower. However, the risk is far higher. One lawsuit or unpaid debt can wipe out your personal savings. Furthermore, you will struggle to open a proper corporate bank account or win contracts from larger clients. Registering a Pvt Ltd company without understanding the ongoing obligations. A Pvt Ltd company comes with real compliance requirements. Annual Returns, board resolutions, statutory registers, and tax filing are all mandatory. As a result, many business owners get caught out by late filing penalties. ASAC manages all of this for our clients so they can focus on their business. Waiting too long to upgrade from sole proprietorship to Pvt Ltd. Many entrepreneurs plan to upgrade "later." However, later often means after a problem has already happened. Registering a Pvt Ltd company early protects you from day one. Foreign nationals trying to register a sole proprietorship. Foreign nationals cannot register a sole proprietorship in Sri Lanka. Only Sri Lankan citizens and permanent residents qualify. Furthermore, even permanent residents should consider a Pvt Ltd company for the additional protection and credibility it offers. Frequently Asked Questions What is the main difference between sole proprietorship vs Pvt Ltd Sri Lanka? The main difference is legal identity and liability. A sole proprietorship has no separate legal identity from its owner — you carry unlimited personal liability. A Pvt Ltd company is a separate legal entity — your personal liability is limited to the value of your shares. Can a foreigner register a sole proprietorship in Sri Lanka? No. Sole proprietorships in Sri Lanka are only available to Sri Lankan citizens and permanent residents. Foreign nationals must register a Private Limited Company through the Department of the Registrar of Companies. Is a Pvt Ltd company better than a sole proprietorship in Sri Lanka? For most serious business owners — yes. A Pvt Ltd company offers limited liability, higher credibility, full corporate banking access, and the ability to take on investors. Furthermore, it allows foreign ownership and opens more opportunities than a sole proprietorship. How much does it cost to convert a sole proprietorship to a Pvt Ltd company in Sri Lanka? There is no formal conversion process — you register a new Pvt Ltd company and transfer your business to it. The cost depends on your specific situation. Book a call with ASAC and we will give you a clear breakdown. Do I need a Company Secretary for a sole proprietorship in Sri Lanka? No. A Company Secretary is only mandatory for Private Limited Companies and other incorporated entities under the Companies Act. Sole proprietorships have no such requirement. Can I have employees as a sole proprietor in Sri Lanka? Yes. Sole proprietors can hire employees. However, you must comply with all labour laws, EPF and ETF obligations, and employment contracts regardless of your business structure. Learn more at the Department of Labour Sri Lanka. How ASAC Can Help Ananda Sirisena & Company (ASAC) helps entrepreneurs choose the right business structure from the start. We have over 30 years of experience in company registration Sri Lanka and corporate governance. As a result, we know exactly which structure works best for different situations — and how to set it up correctly from day one. If you decide a Private Limited Company is right for you, ASAC manages the entire registration process. We prepare all documents, act as your Company Secretary, and handle all ongoing compliance obligations. Furthermore, all ASAC clients get access to The Boardroom — our 24/7 company records platform on mobile and desktop. If you want to protect your business, build credibility, and set yourself up for growth — a Pvt Ltd company is the right move. Book a free 15-minute call with our team below. We will assess your situation and give you a clear recommendation. [INSERT HUBSPOT CALENDAR HERE] Related guides: How to Register a Pvt Ltd Company in Sri Lanka Cost of Company Registration Sri Lanka Documents for Company Registration Sri Lanka Company Secretary Sri Lanka: Do You Really Need One?](https://anandasirisena.lk/wp-content/uploads/Sole-Proprietorship-vs-Pvt-Ltd-sri-lanka-700x350.jpg "Sole Proprietorship vs Pvt Ltd sri lanka")
Company Registration
Tax Registration
Labour Registration
Imports and Export Registration
Trade Marks
Company Secretary
Meetings
Audit & Assurance
Tax Compliance
Payroll Processing
File Search