GOVERNMENT SPONSORED CORPORATIONS ACT

Arrangement of Sections

1. Short title.

PART I

Establishment of Government-Sponsored Corporations

2. Incorporation Order for establishment of a Government-sponsored corporation.

3. Objects of the Corporation.

4. Principal place of business of the Corporation.

5. Powers of the Corporation.

6. Liability of the shareholders of the Corporation.

7. Seal of the Corporation.

8. General control of the affairs and the exercise of the powers of the Corporation.

PART II

Provisions Applicable When the Government Holds The Entire Capital Of The Corporation

9. Application of part II.

10. Members of the Corporation.

11. Number of Directors.

12. Disqualification for being a Director.

13. Appointment of Directors and Chairman of the board of Directors.

14. Term of office of Directors.

15. Appointment of acting Directors.

16. Resignation of Directors.

17. Removal of Directors from office.

18. Eligibility of Directors for re-appointment.

19. Remuneration of Directors.

20. The first Directors and the first Chairman of the board of Directors.

21. Capital of the Corporation.

22. Division of the capital into shares.

23. Allotment of shares to the Government.

24. Transfer of the specified manufactory and other State property and certain contracts and liabilities to the Corporation.

25. Transfer of certain non-pensionable employees of the Government to the Corporation.

26. Appointment of public officers to the staff of the Corporation.

27. Trainees.

28. Reserves and dividends.

29. Accounts of the Corporation.

30. Audit.

31. Copies of auditor's report, profit and loss account, balance sheet, and report of board of Directors to be sent to the Minister and laid before Parliament.

32. Directions by and inquiries at the instance of the Minister.

33. Payment of tax on income or profits of the corporation.

34. Acquisition of land.

35. Sale of shares of the Government.

36. Supplementary Order.

36A. Dissolution of the Corporation.

PART III

Provisions Applicable When the Government Holds Only a Part of the Capital of the Corporation

37. Application of this part.

38. Cessation of application of certain provisions of Part II.

39. Members of the Corporation.

40. Authorised capital of the Corporation.

41. Board of Directors constituted under Part II to continue in office until a board of Directors is constituted under Part III.

42. Number of Directors.

43. Two classes of Directors.

44. Determination of number of appointed Directors and number of elected Directors.

45. Chairman of the board of Directors.

46. Appointed Directors.

47. Elected Directors.

48. Fresh appointment and election of Directors.

49. No vote in respect of Government shares at election or removal of Directors.

50. Remuneration of Directors.

51. Accounts of the Corporation.

52. Application of sections 26, 32, 33, 34 and 35.

PART IV

Provisions Applicable When the Government Ceases to Hold More Than Twenty Per Cent of the Capital of the Corporation

53. Constitution of new board of Directors when the Government ceases to hold more than twenty per centum of the capital of the Corporation.

54. Formation of company to carry out the objects of the Corporation.

55. Dissolution of the Corporation.

PART V

General Provisions

56. Regulations of the Corporation.

57. Application of company law to the Corporation.

58. Register of shareholders.

59. Shares.

60. Staff.

61. Pension scheme for staff.

62. When certain powers of the Minister are not to be exercised.

63. Managing Director.

64. A Director whether shareholder or not may attend meeting of shareholders.

65. Validity of acts and proceedings of the board of Directors.

66. Regulations.

67. Interpretation.

SCHEDULE

19 of 1955,

55 of 1957.

AN ACT to enable the establishment of corporations with capital provided by the Government for taking over and carrying out the purposes of manufactories maintained or wholly or partly constructed by the Government, to regulate the powers and duties of such corporations, to provide for the sale to the public of the shares of the Government in the capital of such corporations and for the conversion of such corporations into incorporated public companies with limited liability when the Government ceases to hold more than twenty per cent of the capital of such corporations, and to make provision for purposes consequential to the aforesaid matters.

[Date of Commencement: 14th April, 1955]

1. Short title.

This Act may be cited as the Government-Sponsored Corporations Act.

PART I

Establishment of Government-Sponsored Corporations

2. Incorporation Order for establishment of a Government sponsored corporation.

(1) Where the Government considers it necessary that a corporation should be established in order to take over and carry out the purposes of a manufactory maintained or wholly or partly constructed by the Government, the Minister, with the approval of the Government, may by order (hereinafter referred to as the "Incorporation Order”) published in the Gazette

(a) specify the manufactory (hereinafter referred to as the "specified manufactory”) to which the Order relates;

(b) declare that a corporation shall be established to lake over and carry out the purposes of the specified manufactory, name to the;

(c) assign a corporate corporation;

(d) specify the objects of the corporation;

(e) determine the initial capital of the corporation, the division of the capital into shares, the classes of the shares, the amount of each share, and the rights attached to each class of shares;

(f) state the principal place of business of the corporation;

(g) fix the number of members of the board of Directors of the corporation when the Government holds the entire capital of the corporation;

(h) appoint as the first members of such board any persons who, under Part II of this Act, are not disqualified for being such members; and

(i) appoint one of the members of such board as the Chairman of such board.

(2) Upon the publication of the Incorporation Order in the Gazette, a corporation (hereinafter referred to as the "Corporation”) consisting of the persons who are for the time being members thereof by virtue of section 10 or section 39, as the case may be, with the corporate name specified in such Order, and with perpetual succession shall be deemed to have been established.

(3) The Corporation may sue and be sued in its corporate name.

3. Objects of the Corporation.

The objects of the Corporation shall be those specified in the Incorporation Order.

4. Principal place of business of the Corporation.

The principal place of business of the Corporation shall be that specified in the Incorporation Order.

5. Powers of the Corporation.

(1) The Corporation shall have the power to acquire and hold and to take on hire or lease any movable or immovable property and to give on hire or lease or to sell or otherwise dispose of any of its properties:

Provided, however, that no immovable property of the Corporation shall be sold without the prior approval of the Minister.

(2) The Corporation shall have the power to do anything necessary for, or conducive or incidental to, the carrying out of its objects, including the power to borrow money for carrying out its objects and to secure the payment of any sum of money by the mortgage of any of its properties:

Provided, however, that, so long as the Government holds more than twenty per centum of the capital of the Corporation, the Corporation shall not borrow or secure the payment of any sum of money exceeding such amount as may be determined from time to lime by the Minister with the concurrence of the Minister in charge of the subject of Finance.

6. Liability of the shareholders of the Corporation.

The liability of any person holding any shares in the capital of the Corporation shall be limit to the amount, if any, unpaid on such shares.

7. Seal of the Corporation.

(1) The Corporation shall have a common seal which shall be in the custody of the board of Directors.

(2) The seal of the Corporation may be altered in such manner as may be determined by the board of Directors.

(3) The seal of the Corporation shall not be affixed to any instrument or document except in the presence of two members of the board of Directors both of whom shall sign the instrument or document in token of their presence.

(4) The board of Directors shall maintain a register of the instruments or documents to which the seal of the Corporation is affixed.

8. General control of the affairs, and the exercise of the powers, of the Corporation.

Subject to the other provisions of this Act—

(a) the general control of the affairs of the Corporation shall be vested in a board of Directors constituted as hereinafter provided; and

(b) the board of Directors may exercise the powers of the Corporation for the purpose of carrying out the, objects of the Corporation.

PART II

Provisions Applicable When the Government Holds the Entire Capital of the Corporation

9. Application of part II.

Save as otherwise provided in this Act, Part II of this Act shall apply to the Corporation so long as Part III of this Act does not apply to the Corporation.

10. Members of the Corporation.

The persons holding office for the time being as members of the board of Directors shall be the members of the Corporation.

11. Number of Directors.

The board of Directors shall consist of such number of Directors as is fixed by the Incorporation Order.

12. Disqualification for being a Director.

A Member of Parliament shall not be qualified to be a Director.

13. Appointment of Directors and Chairman of the board of Directors.

(1) The Minister shall appoint the Directors.

(2) The Minister shall appoint one of the Directors as the Chairman of the board of Directors.

14. Term of office of Directors.

Every Director shall hold office for a period of three years, unless he is earlier removed from office or vacates his office.

15. Appointment of acting Directors.

If any Director is temporarily unable to discharge the duties of his office on account of ill health, or absence from Sri Lanka, or any other cause, the Minister may appoint some other person to act as a Director in his place.

16. Resignation of Directors.

A Director may resign his office by letter addressed to the Minister.

17. Removal of Directors from office.

The Minister may, if he thinks it expedient to do so, remove a Director from office.

18. Eligibility of Directors for re-appointment.

A Director who vacates office by resignation or effluxion of time shall be eligible for reappointment.

19. Remuneration of Directors.

The Directors may be remunerated out of the funds of the Corporation in such manner and at such rates as the Minister, with the concurrence of the Minister in charge of the subject of Finance, may determine.

20. The first Directors and the first Chairman of the board of Directors.

(1) The first Directors shall be the persons appointed as such Directors by the Incorporation Order, and their term of office shall commence on the date of publication of such Order in the Gazette.

(2) The first Chairman of the board of Directors shall be the person appointed as such Chairman by the Incorporation Order.

21. Capital of the Corporation.

(1) The initial capital of the Corporation shall be that specified in the Incorporation Order.

(2) The capital of the Corporation may, so long as Part III of this Act does not apply to the Corporation, be increased from time to time by such amount as may be authorised by resolution of Parliament to be paid to the Corporation out of the Consolidated Fund for the purpose of increasing such capital.

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