The Companies (Amendment) Bill 2019 received House approval yesterday, further reducing the difficulties investors undergo to register a new business in Sri Lanka. Industry and Commerce Deputy Minister Buddhika Pathirana moved the Motion in Parliament, highlighting the impact it would have in attracting much-desired foreign investment to the country.
“The Companies Act No. 7 of 2007 was passed in the Parliament and came into effect from 3 May 2007. This Bill will amend Clauses 5, 9, 10 of the Companies Act.
These Amendments will have a direct impact on the World Bank’s Doing Business Index. These Amendments are prescribed as a part of the reforms to attract more investments, as per the Cabinet decision reached in September 2018. All in all, this Bill further simplifies and reduced the burden followed to register a business,” he said.
Clause 2 of the Bill amends Section 427 of the Companies Act, and the legal effect of the Section as amended is to make floating charges granted by a company subjected to the provisions of the Secured Transactions Act, No. of 2019, as consequential to the enactment of the said Act to make provisions applicable to secured transactions in movable property.
Clause 3 of the Bill amends Section 428 of the Companies Act, and the legal effect of the Section as amended is to make provisions for the registration of any instrument creating a floating charge over any movable property under the Secured Transactions Act 2019.
Clause 4 amends Section 431 of the Companies Act, and the legal effect of the section as amended is to make the provisions of the Secured Transactions Act 2019 applicable when determining the priority of floating charges created over any movable property. Clause 5 inserts the new Section 433A in the Companies Act, to provide for an interpretation of the term “floating charge” for the purposes of the application of the Secured Transactions Act 2019. (FT)