Starting a pawnbroking business in Sri Lanka involves a series of regulatory requirements to ensure that the business operates legally and smoothly. If you’re planning to launch a pawning business, you must first register a Private Limited Company and obtain a business license from the relevant authorities. This blog outlines the step-by-step process for setting up a pawning business in Sri Lanka and how 360 Accountants can assist you in the company registration process.
Step 1: Register a Private Limited Company
To legally operate a pawnbroking business in Sri Lanka, the first requirement is to register a Private Limited Company. This step is necessary to establish your business as a legal entity, which provides you with limited liability protection and allows you to engage in formal business activities.
How 360 Accountants Can Help:
At 360 Accountants, we offer comprehensive company registration services. Our team will guide you through each step of the company registration process, ensuring that all documentation is accurately submitted and that your business is officially recognized by the Registrar of Companies.
Step 2: Apply for a License from the Divisional Secretariat
Once your company is registered, you will need to obtain a pawnbroking license from the Divisional Secretariat in the area where your business will operate. The Divisional Secretariat will review your application, and you will need to provide certain documents to complete the process.
License Requirements:
- Initial Bank Guarantee Deposit: A bank guarantee deposit of LKR 100,000 must be made at the National Savings Bank (NSB). This deposit acts as a security measure and is required to proceed with your license application.
- Police and GS Clearances: The director of the company will need to obtain police and Grama Niladhari (GN) clearance to ensure that the individual has no criminal record or legal issues.
- Insurance: Your business premises must be insured, and you will also need to have a safe to store valuable items that are pledged in the pawning process.
How 360 Accountants Can Help:
Our team can assist with submitting your license application to the Divisional Secretariat and provide guidance on all the documentation needed. We can also help ensure that your bank guarantee and insurance requirements are properly met.
Step 3: Pay the License Fee and Obtain the License
Once all requirements are met, you will need to pay the license fee. The initial license fee for setting up a pawning business is LKR 27,000. After obtaining the license, you can start operating your pawning business legally.
- License Renewal: The business license is renewable annually, with a renewal fee of LKR 2,000.
How 360 Accountants Can Help:
We can guide you through the payment of the license fee and ensure that the annual renewal process is handled efficiently. With our help, you won’t have to worry about missing any important deadlines or requirements.
Step 4: Additional Requirements
To run a pawnbroking business in Sri Lanka, there are a few other essential requirements:
- Iron Safe: An iron safe must be available at the business premises to store the valuables pledged by customers.
- Business Place Insurance: Your business place must also be insured to protect against potential losses from theft, fire, or other unforeseen circumstances.
Conclusion: Start Your Pawning Business with 360 Accountants
Starting a pawnbroking business in Sri Lanka requires adhering to a series of legal and regulatory steps, including company registration, obtaining the necessary licenses, and meeting specific operational requirements. At 360 Accountants, we specialize in helping clients navigate these processes, ensuring that all legal aspects are covered.
Whether you need assistance with company registration, obtaining a pawnbroking license, or ensuring compliance with all local regulations, our experienced team is here to assist you every step of the way.
Contact 360 Accountants today to get started on your journey to running a successful pawnbroking business in Sri Lanka.
