Companies (Amendment) Act 2025 elevating governance, transparency and global alignment

Harshanee  Deshapriya

In the following interview, Harshanee Deshapriya, Group Chief Legal Officer of JXG (Janashakthi Group), explores how the Companies (Amendment) Act No. 12 of 2025 fosters a financial ecosystem and future of reward through its implementation of transparency, accountability, and global best practices. She examines the importance of enhancing good governance and compliance for local financial institutions to drive sustainable futures for the country. 
Following are excerpts of the interview.
Q What is the significance of the Companies (Amendment) Act No. 12 of 2025 to Sri Lanka’s financial sector? 
Consistent with globally recognised standards of the Organisation for Economic Co-operation and Development (OECD) and the Financial Action Task Force (FATF),with a particular focus on Anti Money Laundering (AML) and the prohibition of financing terrorism, the Act upholds a strictanti-anonymity principle. 
This principle requires all natural persons who ultimately own, control, and benefit from companies to identify and disclose themselves, their companies, trusts and/or accounts. What this means is, it applies to real, identifiable human beings beyondlegal persons such as companies or other corporate entities. All natural persons are required to be transparent within corporate registries to uphold global anti-anonymity and beneficial ownership standards.
Since it eliminates ownership from going unnoticed, the Act enhances traceability. It introduces mandatory beneficial ownership registers. These are public or private records of the individuals who own or control a company. It also prohibitsthe issuance of bearer shares and share warrants to bearer.
The Act enhances investor confidence, reinforces a culture of ethical business practices, and promotes healthier global business operations by strengthening transparency. Consequently, it strengthens local corporate governance, aligning it with global regulatory frameworks and standards. 
QHow does the Act empower financial institutions and legal teams to lead with integrity? 
Integrity is the foundation of trust within the financial sector. The Act ensures it through a system of disclosure and transparency requirements, mandating beneficial ownership, and bearer share disclosuresto secure accountability between corporate entities and among multiple stakeholders comprised of shareholders, directors, officers, and beneficial owners with regulatory authorities. 
The Act compels operational integrity using strong deterrents to non-compliance. Furthermore, it empowers public access to beneficial ownership information, ensuring corporate structures cannot conceal ownership or evade regulation. 
More importantly, it eliminates untraceable and anonymous shareholding in the form of bearer shares and bonds. The Act marks a critical step towards capital integrity.
Q Could this Amendment help build a financial ecosystem capable of withstanding future regulatory and economic upheavals? 
Enduring economicstruggle requires two components. One is the ability of financial systems to absorb economic shocks. The other is a company’s capacity to sustain compliance, governance, and operational continuity under stress.
By embedding integrity into the fabric of corporations, the Act enhances transparency, minimising fraud, and resolving hidden liabilities. The cascading effect builds market confidence. Additionally, because the Act promotes director accountability, independence of boardsand communication with shareholders, it fosters a healthy decision-making infrastructure.
Strengthened capital integrity safeguards mitigate counterfeit capital, credit exposure, and other forms of misconduct. In a word, the Act creates a durable foundation for endurance, supporting the country’s economic stability robust for the future.
Q How does the Act bridge Sri Lankan corporate law with international best practices? 
International standards require anti-anonymity principles in any financial framework. Prior to the amendment, these principles were missing in the local corporate legal frameworks. The Act addresses our country’s immediate need to align our corporate governance and financial compliance frameworks with international standards.
The bridging of corporate law with international best practices begins with removing the possibility of bearer shares and bonds from our economic landscape.Corporate governance enhancementand elevated data protection further emphasise accountability, disclosure, and responsible information management, for shareholders and the public alike. 
These measures strengthen our transparency and corporate shareholding structures, effectively terminatingloopholes and avenues of misconduct. By implementing the Amendment Act, we’re making a decisiveand much neededmove to elevate our international standing and compliancy.
QHow will the Act reshape legal departments in financial institutions? 
The Act requires each company to appoint an authorized person, as part of cross-functional efforts, to coordinate legal, operational,and administrative teams. It expands the scope of legal divisions, positioning them as ethical partners and strategic gatekeepers of governance and integrity.The legal division will form the backbone of an ethical culture, performing an advisory and educative role to directors and boards. 
Legal and company secretarial teams mustcontend with a significant broadening of their mandate and workloads. They are now required to manage larger disclosure registries and ongoing communication with Chief Executive Officers and operational heads. 
Consequently, they become cross-functional partners, coordinating with risk management, board advisory, policy formation, and stricter liability provisions to ensure compliance. 
Q What challenges do you foresee in adopting new regulations, especially around data collection, reporting, and enforcement? 
The immediate challenge will be navigating the sheer volume, complexity, and continuity of data collection. The process requires consistent updating and accuracy. Dedicated, data-literate professionals are needed. Moreover, finding a balance between balancing transparency with confidentiality to maintain privacy and trust is crucial. Technologically, there’s a need for a streamlined digital infrastructure capable of handling complex corporate disclosures. Finally, dedicated supervision and monitoring to ensure effective compliancearenecessary. 
QAs a Group Chief Legal Officer, what impactful changes must financial institutions implement to comply with the Act? 
Cultivating conscious leadership is essential. So is the need for legal and compliance divisions to educate boards about the implications of recent amendments. It’s vital for companies to revise their charters, policies, and protocols, as required. 
Complexities yet to be resolved, including the question of data in relation to foreign shareholding and cross border ownership, require addressing. Establishing centralised ownership registries as traceable sources of shareholding data is also required. Most importantly, compliance needs to become a non-negotiable, integrated aspect of company culture.