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Wide acceptance for the new Companies Act

Greater accountability demanded of Governing Boards; shareholders' rights strengthened :

LEGISLATION: A new Companies Act shortly to come into force constitutes a bold reformation of the country's present Companies Act.

The new Companies Act specifies the demanding responsibilities and proportionate accountability imposed on Directors in the governance of their companies.

The reformed Companies act will consider the rights of shareholders as vital. These are some of the findings of the Daily News on the new Act.

Daily News spoke to various members of governing bodies of leading institutions in the country in this connection.

General Manager Finance, Agalawatte Plantations Limited Senerath Devendra said that the new Companies Act strengthens the values of shareholders. Directors and the governing party's decision making powers are restricted vastly, at a glance. The present Companies Act is based on the British legal system and the reformation will be on the Canadian legal systems.

Financial Controller, Korean Spa Industrial Co (Pvt) Ltd Anuja Srinath said most of the new amendments are acceptable. Managers and Directors of a company can work on their own without the assistance of the Company Secretaries and other parties if they are thorough in their work.

In future, a Memorandum of Companies is not necessary to form a company. He said that when compared to the present Companies Act in practice, pre incorporation contract can be rectified in the reformed new Companies Act. Auditors should issue the certificate and sentence in the case of insolvency of a company.

Listed Companies can purchase their own shares after the implementation of the changes. This will enable the companies to regulate the activities effectively. These are a good lead for change.

"Directors have much judicial power under the roof of the new Companies Act. This will enable the governing parties to be more responsible and powerful in their decisions.

Over default of statutory and other payments, if a party wants to sue a company, they can sue the Director too, on that specific default payment", said Tax Consultant and Company Secretary, Key Management Consultant (Pvt) Ltd, H. I. P Imaduwa.

"Through this reformation both parties will be happy and specially the minority shareholders' rights will be well built.

"To accomplish a new company it's necessary to submit the articles of the company and a Director will be enough as per the new Companies Act. This will be a moderate standard when compared to the Companies Act in practice" Manager Finance, Janashakthi Insurance Dhammika Seneviratne said.

"Time demands a change in our daily statutory regulations as well. This reformation of the Companies Act 1989 will make the Directors and the Managers of Companies more responsible.

"Transparency, accountability and business ethics will be expected of both parties. The delegation of responsibility is an added advantage of the new reformed Companies Act, Senior Manager, Finance, Peoples Leasing Andy Ratnayake said.

Apart from these, many are not aware that these changes in the Companies Act will be practical since they have been tried several times.

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