New company bill passed
“There is no doubt that the passage and implementation of this bill will bring about a major revolution in the business sector in Maldives,” Fayyaz said.
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By
Ahmed Naif
Parliament on Tuesday passed a new bill on companies that will transform the creation and operation of companies in the country.
The bill, which was proposed by previous government of former President Ibrahim Mohamed Solih, was passed in parliament on Tuesday.
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In favour - 53 MPs
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Against the bill - 1 MP
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Total attendance - 54 MPs
The bill was passed on Tuesday with 35 amendments proposed by the economic committee. Many of the amendments are not amendments to the main parts of the bill. Instead, the amendments are to change the wording of some articles of the bill and to arrange some articles to make the meaning clearer.
Anyone can create a company
The biggest change in the 16-chapter bill is that a single person can register and operate a company. Currently, if a company is formed, more than one person must be a shareholder. Otherwise, the business must be registered as a sole proprietorship.
In addition, the various types of companies are detailed in the bill. They include:
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Companies set up under presidential decrees should also be formally registered as companies with the ministry
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Foreign investments registered in Maldives will also be given a special classified number and public companies will be numbered for easy identification
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Instead of classifying the businesses that the company will run at the time of registration of the company, they should be included in the basic rules and changed to what is approved by the board
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Require the company to have a service address to which documents can be sent in addition to the registered address
Scrapping of annual fee
Another important change in the bill is that companies will not have to pay annual fees. Currently, the annual fee of companies is MVR 2,000.
The government proposed to scrap the fee because there are many companies that do not pay their annual fees. And that is a difficulty for companies. Therefore, making it easier to run companies is the reason why the bill was amended. Instead of the annual fee, the government's intention is to charge a fee for various business permits obtained by companies.
Shareholder-related changes
The new bill will also bring major changes to the company's shareholders. The changes are:
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The bill should include provisions to make shareholders and directors of companies more accountable
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Persons who neglect the affairs of the company should not be directors for a certain period of time
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Allowing individuals who are shareholders of a company to appoint others to represent them; as of now, a shareholder can appoint a person in his place if the shareholder has a company*.
In addition, the bill will end the fact that the company's articles of association are approved by the Registrar of Companies. The main reason for the change is that it is not practical to approve the constitution by the Registrar. The Registrar also faces issues in articles of association when he goes to court in various cases related to companies.
Fayyaz Ismail, who was economic minister when the bill was sent to the parliament, congratulated the MDP parliamentary group and the economic ministry team on the passage of the bill on Tuesday. He said he was happy with the modern changes that the bill would bring.
“There is no doubt that the passage and implementation of this bill will bring about a major revolution in the business sector in Maldives,” Fayyaz, who serves as MDP chairperson, said.
