Beneficial Ownership Law enacted with TISL’s amendments

• TISL says its recommendations to Companies (Amendment) Act, No. 12 of 2025 enhance transparency and public accountability 
• Calls on Govt. and Registrar of Companies to ensure effective and meaningful implementation 
• Asserts new law would enable effective detection and prevention of corruption, money laundering, illicit financial flows; could also prevent conflicts of interest, tax evasion, potential money-laundering schemes and abuse of power

Parliament Speaker Dr. Jagath Wickramaratne on Monday endorsed the certificate on the Companies (Amendment) Bill and accordingly, the Companies (Amendment) Act, No. 12 of 2025 is now enacted.

Transparency International Sri Lanka (TISL) said in a statement that it welcomed the constructive response of the Attorney General to the concerns raised in TISL’s petition filed in the Supreme Court challenging the Bill to amend the Companies Act, No. 07 of 2007. The petition was filed in the public interest, seeking to ensure that the proposed legislative amendments uphold Constitutional rights and beneficial ownership transparency.

TISL’s petition specifically contested Clause 7 of the Bill, which introduces Sections 130A-130J concerning the establishment of a Beneficial Ownership Information (BOI) register. Arguing that these provisions were inconsistent with the Right to Equal Protection of the Law and the Right of Access to Information, TISL raised concerns that the provisions are inadequate in promoting transparency and public accountability, as:

• Section 130A (6) – does not oblige the Registrar of Companies to maintain a proactive, digital publication of a BOI register in integration with other State databases.
• Section 130D – restricts public access to beneficial ownership information to only the full name and the nature and extent of ownership, and even that only upon formal request. 

At the Supreme Court hearing held on 23 June, the Attorney General submitted that amendments would be made to address the concerns raised in the petition. Accordingly, at the second reading of the Bill, the Government, as undertaken, has caused the following changes:

• Allow free public access, electronically or physically, to details of full names, including previous names, nationalities, countries of residence, business addresses, and the nature and extent of beneficial ownership of the owners of a company. 
• Any member of the public can obtain the said details as an authenticated copy from the Registrar of Companies by making an application and upon paying a prescribed fee.
• Any member of the public intending to obtain any further information set out in subsection (1) of 130A that is not publicly accessible may make an application for information in terms of the provisions of the Right to Information Act, No. 12 of 2016. 

TISL noted the absence of public access to records of adequate, identifiable beneficial ownership details rendered the BOI registry an ineffectual and meaningless mechanism, which is not fit for its intended purpose. Limiting the information available to the public inhibits the ability to sufficiently identify beneficial owners, especially in instances of name duplication and common names, thereby undermining the purpose of the BOI register. 

TISL contended that such restriction of information, therefore, violates the Fundamental Right to Equal Protection of the Law and Right to Information guaranteed respectively under Articles 12(1) and 14A of the Constitution, whilst undermining the purpose of the BOI register itself.

Unrestricted access to a BOI registry while protecting rights also fosters and promotes ethical business and practices. 

Expanding the scope of information accessible to the public beyond the mere full name of ownership significantly strengthens transparency and accountability. The establishment of a publicly accessible BOI register is a vital reform that enables the identification of individuals who ultimately own or control companies, TISL said. 

TISL called upon the Government and Registrar of Companies to ensure effective and meaningful implementation of this law which will significantly enhance corporate transparency and accountability in Sri Lanka, enabling effective detection and prevention of misuse of corporate structures for corruption, money laundering, illicit financial flows, conflicts of interest, tax evasion, potential money-laundering schemes, and abuse of power.