Pres ratifies new companies bill; abolish annual fees
The law will come into force on the 1st of next month.
By
Aishath Fareeha Abdulla
The President has approved the Companies Bill, which will bring about major changes in the establishment and operation of companies in Maldives. According to the bill, one person is allowed to form a company in addition to not having to pay an annual fee.
The bill passed by the Parliament on the 6th of this month has become law with the President's approval on Wednesday.
This is the first bill passed by President Muizzu since he took office on 17th last month.
The law will come into force on the 1st of next month.
The biggest change that will come when the bill becomes law is that it will allow for a single person to set up a company.
Previously, if a company was formed, more than one person had to be a shareholder. Otherwise, you will have to register your business as a sole proprietorship.
In addition, the various types of companies are detailed in the Act.
They include:
-
Official registration of companies established under a Presidential Decree as a company with the Ministry
-
Foreign investments registered in Maldives will also be given a special classified number and public companies will be numbered for easy identification
-
Instead of classifying the businesses to be carried on by the company at the time of registration, they should be included in the articles of association and changed to be approved by the board
-
Require the company to have a service address to which documents can be sent in addition to the registered address
Annual fee deduction
Another important change in the law is that companies will not have to pay annual fees. Currently, the annual fee of companies is MVR 2,000 must be paid.
The reason for the proposed cut is that there are many companies that do not pay their annual fees. And that is a trouble for companies. Therefore, making it easier to run companies is the reason why the bill was prepared. Instead, the government's intention is to charge a fee for various business permits obtained by companies.
Shareholder-related changes
The new law will also bring about major changes in relation to the company's shareholders. The changes are:
-
The bill should include provisions to make shareholders and directors of companies more accountable
-
Persons who neglect the affairs of the company should not be directors for a certain period of time
-
Allowing private individuals who are shareholders of a company to appoint others to represent them; currently, a shareholder can appoint a person in his place if the shareholder has a company
In addition, the new law would put an end to the fact that the fundamental regulation of the company is approved by the company's registrar. The main reason for such a change is that it is no longer practical for the registrar to approve the basic rules. Even in court in cases related to companies, they face issues in basic rules that the registrar has accepted.
