Conversion Of Public Corporations Or Government Owned Business Undertakings Into Public Companies Act (No. 23 of 1987)

Sri Lanka Consolidated Acts

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Conversion Of Public Corporations Or Government Owned Business Undertakings Into Public Companies Act (No. 23 of 1987) - Sect 3

Vesting of Corporation or business undertaking as the case may be in company

(1) With effect from the date of publication of the Order under subsection (2) of section 2, in the Gazette (in this section referred to as "the relevant date ") the corporation or the business undertaking, or part thereof, as the case may be, to which the Order relates shall vest absolutely in the company referred to in that Order.

(2) Without prejudice to the generality of subsection (1)

(a) all property movable or immovable

(i) owned by the corporation; or

(ii) vested in the State,

	(b) all liabilities of the corporation or the business undertaking, as the case may be, subsisting on the date immediately preceding the relevant date, and specified in the Order made under section 2 (2) shall be deemed to be liabilities of the company with effect from the relevant date;

(i) of the corporation on the day immediately preceding the relevant date, who are not offered employment with the company shall be entitled to the payment of such compensation as may be determined by the Cabinet of Ministers; and .

(ii) of the business undertakings, on the day immediately preceding the relevant date, who are not offered employment with the company shall be entitled to the payment of such compensation as may be determined by the Cabinet of Ministers;

	(d) all contracts and agreements entered into for the purposes of the corporation or the business undertaking, as the case may be, and subsisting on the day immediately preceding the relevant date, and specified in the Order made under section 2 (2) shall be deemed to be contracts and agreements entered into by that company;

(e) all actions and proceedings instituted by or against

(a) the corporation; or

(b) the business undertaking or the Attorney-General as representing the business undertaking,

(f) the profit and income, if any arising from the vesting of a corporation or business undertaking in a company under subsection (1) shall be deemed not to be

(a) a capital gain within the meaning of section 7 of the Inland Revenue Act, No. 28 of 1979;

(b) a profit from trading, within the meaning of section 23 (3) (b) of that Act,

(g) where a public corporation or a business undertaking is vested in a company under subsection (1)

(i) any loss incurred by such corporation or business undertaking which has not been set off against its statutory income in any year of assessment shall be deemed to be a loss incurred by such company; .

(ii) any capital loss incurred by such corporation or business undertaking in the year of assessment in which such vesting takes place shall be deemed to be a capital loss incurred by such company.

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