President Muizz ratifies Company Act (Photo Credits: Presidency Maldives)
A New Era for Business: Maldives Enacts Company Act
In a significant move towards enhancing the business landscape of the Maldives, President Dr. Mohamed Muizzu has officially approved the Company Act (Act No. 07/2023) today.
The recently ratified Act serves as a comprehensive legal framework, outlining the terms and conditions governing the establishment, registration, operation, and dissolution of companies within the Maldives. It encompasses a broad spectrum of rules and procedures applicable to various aspects of company management in the country.
One of the key provisions of the Act pertains to the establishment, registration, and management of companies as business entities. In an effort to streamline the process, the legislation defines general, convenient, and favorable terms and conditions for company registration, incorporation, and liquidation. Importantly, it underscores the significance of transparency by mandating rules for the compilation, maintenance, and publication of a register of companies.
Under the new legal framework, diverse types of companies, including private companies, public companies, government companies, and local authority companies, can be established. Additionally, the Act introduces a requirement for foreign companies to undergo re-registration, providing a clear and concise process for such cases.
A noteworthy feature of the Company Act is the provision allowing the formation of a company with a single shareholder, a move that aligns with contemporary business practices. Private companies, in particular, stand to benefit from an increased shareholder limit, with the Act now permitting up to 100 shareholders. Moreover, the legislation mandates annual general meetings for companies with more than one shareholder, ensuring robust corporate governance practices.
The effective date for the implementation of the Company Act is set for January 1, 2024. This gives businesses and stakeholders a transitional period to adapt to the new regulatory landscape and align their operations with the stipulations of the Act.
As the Maldives embraces this progressive legal framework, it marks a pivotal moment for the country's business community. The Company Act not only reflects a commitment to modernize company governance but also aims to foster an environment that encourages transparency, accountability, and efficiency in business operations. As the nation looks ahead to a new era for businesses, the Act is poised to play a pivotal role in shaping the future of corporate governance in the Maldives.