In Sri Lanka, a sole proprietorship or partnership is registered at the Divisional Secretariat for the area where the business operates, while a private limited company is incorporated with the Department of the Registrar of Companies through its online eROC system. Most small businesses start as a sole proprietorship because it is quick, cheap and done in person.
Which structure is right for you?
| Sole proprietorship | Partnership | Private limited company | |
|---|---|---|---|
| Owners | One person | Two or more partners | Shareholders (can be one or more) |
| Where to register | Divisional Secretariat | Divisional Secretariat or Provincial Council | Registrar of Companies (eROC) |
| Personal liability | Unlimited | Unlimited, shared | Limited to your shares |
| Best for | Small shops, freelancers, online sellers | Family or friend businesses | Growing businesses, investors, larger contracts |
Registering a sole proprietorship
Sole proprietorships are registered in person at your local Divisional Secretariat; they cannot currently be registered online (Deel, updated June 2026). Bring:
- The business name registration application form from the Divisional Secretariat
- A certified copy of your NIC
- A Grama Niladhari report on the business location
- Proof of the business address (utility bill, lease or deed)
- An affidavit on the business activity and starting capital, if requested
- Approvals for regulated activities, such as health clearance for food businesses
Fees are modest and vary by Divisional Secretariat. Once approved, you receive a Certificate of Registration of Business Name, which you should display at your premises. Plan for one to two weeks if your documents are complete.
Registering a partnership
The process is similar to a sole proprietorship, with all partners' details included. Write a partnership agreement first: who invests what, how profits are shared and what happens if a partner leaves. It prevents most partnership disputes.
Incorporating a private limited company
Companies are incorporated online through eROC, the Registrar of Companies' portal (Lankawebsites, January 2026). The usual steps are:
- Search for and reserve the company name.
- Prepare the Articles of Association and the incorporation forms for directors and the company secretary.
- Upload the documents on eROC and pay the government fees.
- Receive the Certificate of Incorporation.
A company needs at least one director, a registered office in Sri Lanka and a company secretary. Many founders use a company secretarial firm, which handles the forms and the annual returns.
After registration
- Tax: get a Taxpayer Identification Number (TIN) from the Inland Revenue Department, and register for VAT if your turnover passes the threshold.
- Bank account: open a business current account with your registration certificate.
- Employees: register for EPF and ETF when you hire staff.
- Local licences: your local authority may require a trade licence, especially for shops and food.
- Sector approvals: tourism businesses register with SLTDA (see our guide to starting a tour business).
Get found once you are registered
A registered business can verify a Google Business Profile, open a card payment gateway and register a domain in its own name. These three steps make customers trust you online. Our guide to Google Business Profile shows how to appear on Google Maps.
Common mistakes to avoid
- Registering a name you cannot protect online. Check the domain and social handles before you submit.
- Mixing personal and business money. Open a separate account as soon as you can; it makes tax and loans easier.
- Forgetting sector approvals. Food, health, education and tourism businesses often need extra permissions.
- Choosing a company too early. A company brings annual returns and secretarial costs. Many small businesses start as a sole proprietorship and incorporate later.
- Not keeping records. Keep invoices and receipts from the first day.
Sole proprietorship or company: a quick decision guide
| Your situation | Usually suits |
|---|---|
| Freelancer or small shop, low risk | Sole proprietorship |
| Two friends or family members starting together | Partnership with a written agreement |
| Plans to raise investment or hire many staff | Private limited company |
| Large contracts with corporate or government clients | Private limited company |
| Tourism business seeking SLTDA registration | Either, but check SLTDA capital rules |
Documents to keep together
Keep a folder, paper and digital, with your registration certificate, NIC copies, address proof, tax registration, bank letters and any licences. Banks, payment gateways, Google verification and tenders all ask for the same documents.
How Halcent can help
Once your business is registered, Halcent can put it online properly: an AI-powered website with your domain, Google Business Profile setup and an assistant that answers customers 24/7. Ask for a free AI Snapshot to see what would help first.
This guide is general information, not legal advice. Fees and procedures change, so confirm the current requirements with your Divisional Secretariat, the Registrar of Companies (drc.gov.lk) or the Inland Revenue Department.
Frequently asked questions
Can I register a business online in Sri Lanka?
Private limited companies are incorporated online through eROC. Sole proprietorships and partnerships are registered in person at the Divisional Secretariat.
How long does business registration take in Sri Lanka?
A sole proprietorship usually takes one to two weeks if your documents are complete. Company incorporation through eROC can be faster once the name is approved.
Do I need to register my business to sell on Facebook?
If you trade under a business name, it should be registered. Registration also helps you open a business bank account, a payment gateway and a verified Google Business Profile.