There are several ways of doing business in Sri Lanka-
- Sole Proprietorship– may be formed without official approval. An individual commencing a sole proprietorship in any other name other than his/her actual name has to apply to the Registrar of Business Names of the respective Provincial Council for registration. The application has to be made in the prescribed form issued by the respective Provincial Council along with the appropriate fee as determined by the Ordinance of such amendments as may be prescribed from time to time. This has to be done with 14 days of commencing the business.
- Partnership– A partnership could be form verbally, impliedly or in writing. Most of the partnerships carry on business in line with the provisions made in Partnership Agreement.Section 3 of the Introduction of Civil Law Ordinance Chapter 89 provides that the English Law will apply to partnerships. Partnerships Ordinance Chapter 179 of 1866 contains a few provisions amending the law of partnership. The other ordinance, which is applicable, specifically to partnerships, is the Prevention of Frauds Ordinance Chapter 84.
- Companies-established in Sri Lanka are governed by the Companies Act No. 17 of 1982 (the Companies Act). The Companies Ordinance Chapter 145 of 1939 governs the companies, which were incorporated prior to 1982. The registering authority for a Limited Liability Company (LLC) is the Registrar of Companies. LLC is one of the most common business entities in Sri Lanka. Setting up of LLC required one Director and two shareholders, who may be of any nationality. Article 5 of the Companies Act, 2007 however, provides that the owners of the Company must appoint one person, resident in Sri Lanka as the Company Secretary. Incorporation process involves obtaining a name approval from the Registrar of Companies followed by filing of the application (with registration form, consent forms of Directors and Secretaries) along with the requisite fees.
Foreign Company– may establish branch or liaison office in Sri Lanka for conducting their business or research besides incorporating a company under the provisions of the Companies Act, 2007. Companies may also opt to be registered as offshore or overseas companies
