⚖️ SL Companies Act Amended: Beneficial Ownership Disclosure Mandatory

New amendments (Act No. 12 of 2025) to the Companies Act mandate full disclosure of beneficial ownership, aiming to end anonymous ownership and align Sri Lanka with global Anti-Money Laundering (AML) standards ahead of the FATF evaluation. • Core Requirements: Companies must register beneficial owners, maintain detailed registers for 10 years (even after liquidation), and notify the Registrar of changes within 14 days. The law also explicitly bans bearer shares. • Enforcement: Non-compliance carries substantial fines and criminal liability for directors, secretaries, officers, and shareholders. Ignorance is not an acceptable excuse. • Challenges: Industry experts note significant difficulties in enforcement due to tracing ownership through hidden family wealth and complex offshore structures (e.g., BVI, Hong Kong). Identifying beneficial owners in foreign corporate and fund structures is also complex. • Compliance Facilitation: The Registrar of Companies is preparing regulations, digitalizing the filing system for online submission, and will accept electronic signatures. While the Central Depositary System (CDS) assists, the primary legal responsibility rests with the companies.