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The Ceylon Chamber of Commerce (CCC) has urged the government to facilitate the easy exit of failed companies and enact the new Companies Act without further delay. It has also stated its stand on bankruptcy laws.

In a letter to Minister of Commerce and Consumer Affairs Ravi Karunanayake with copies to Registrar of Companies and Chairman Company Law Advisory Committee, the CCC has lauded the initiative of the minister to have a public hearing on the proposed Companies Act for a review by all stakeholders before presenting it in parliament. The Chamber has said that the Act is being withheld without being debated in parliament pending a further review by a committee to incorporate the necessary amendments to the Company Law to permit the easy exit of failed companies.

The letter states that the proposed Companies Act agreed by all stakeholders following even a public hearing should be enacted without further delay.

According to the CCC, the proposed Act has sufficient safeguards and facilitative provisions for re-organisation, restructure or liquidation of companies falling into the category of failed companies.

The bankruptcy laws must cover all types of business entities including companies, State-owned business enterprises, partnerships and other forms of trade or business. They also state that bankruptcy laws must be enacted only after an extensive review is done by all stakeholders.

The CCC has also written to the Chairman of the Committee to recommend measures for the Easy Exit of Companies, that the primary concern from the business point of view is twofold ie; providing relief to honest debtors and the opportunity to work out a solution which will solve its financial problems and allow its business a fresh start, free from the demand of creditors.

The CCC states that the government should consider the formulation of a separate bankruptcy law modelled on the principles of Chapter 11 which are considered desirable in the local context. It says that the law should ideally be complementary to the provisions of the proposed Companies Act, should be applicable to all forms of business and should not be limited to incorporated companies.

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