Introduction
The Articles of Association (AoA) is a fundamental document for any company in Sri Lanka. It outlines the internal rules, management structure, and responsibilities of the company, its directors, and shareholders. Submitting the AoA during company registration is a legal requirement and ensures proper corporate governance.
1. Purpose of the Articles of Association
Submitting the AoA serves several key purposes:
- Legal Compliance – It is a statutory requirement under the Companies Act.
- Defines Company Structure – Outlines roles, responsibilities, and powers of directors and shareholders.
- Internal Governance – Provides clear rules for decision-making, meetings, and shareholding rights.
- Conflict Resolution – Acts as a reference for resolving internal disputes.
- Corporate Transparency – Enhances credibility with regulators, investors, and stakeholders.
2. Who Needs to Submit Articles of Association
- All private limited and public companies must submit an AoA.
- Companies may either adopt the standard AoA in Table A of the Companies Act or draft a customized AoA to fit their business.
- Foreign-owned companies must submit the AoA in English and also indicate company objectives in Sinhala and Tamil if applicable.
3. Contents of the Articles of Association
A well-prepared AoA generally includes:
- Company Name and Type – Official name, type of company (private/public), and registered office address.
- Share Capital – Total number of shares, classes of shares, and nominal value.
- Shareholder Rights – Voting rights, dividend entitlements, and procedures for share transfers.
- Directors’ Powers and Duties – Authority, responsibilities, appointment, and removal process.
- Meetings and Resolutions – Procedures for holding board and shareholder meetings, quorum requirements, and resolution approvals.
- Company Secretary Role – Duties and responsibilities of the appointed company secretary.
- Dividends and Accounts – Procedures for distributing profits and maintaining accounting records.
- Amendments – How the AoA can be modified in the future.
4. Steps to Submit Articles of Association
Step 1: Draft the AoA
- Use the standard template in Table A for simplicity or create a customized version reflecting your company’s specific governance needs.
- Ensure all statutory requirements are met.
Step 2: Translate if Necessary
- For foreign-owned companies, include translations of the company objectives in Sinhala and Tamil.
Step 3: Upload AoA to e-ROC Portal
- Log into your e-ROC account and navigate to the “Articles of Association” section.
- Upload the AoA as a PDF file.
Step 4: Pay Submission Fees
- Current fees for AoA submission are LKR 2,000 + VAT.
Step 5: Verify and Submit
- Double-check all information, including company name, objectives, and directors’ details.
- Submit AoA along with other incorporation documents.
5. Common Mistakes to Avoid
- Using outdated or incomplete AoA templates
- Omitting necessary clauses for directors, shareholders, or meetings
- Forgetting translations for foreign-owned companies
- Uploading incorrect or unclear PDF files
- Not updating AoA after amendments in company structure or rules
Proper attention to the AoA ensures smooth registration and prevents legal disputes.
6. Importance of Submitting the Articles of Association
- Legally establishes the company’s rules and governance framework
- Provides clarity on directors’ and shareholders’ rights and duties
- Supports transparency with regulators, banks, and investors
- Helps resolve internal disputes efficiently
- Serves as a reference document for audits and statutory inspections
Conclusion
Submitting a well-prepared Articles of Association is essential for any company in Sri Lanka. It ensures legal compliance, clearly defines corporate governance, and provides a structured framework for the company’s operations. Accurate drafting and proper submission of the AoA protect the company, its directors, and shareholders, creating a solid foundation for long-term business success.
