This guide highlights the significant changes brought about the Companies Act 2023 in relation to private and foreign investment companies.
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The following summary presents essential changes applicable under the new Act to private and foreign investment companies in the Maldives.
Private Companies
The Act introduces pivotal changes enabling the formation of single shareholder companies with simplified management structures. It removes the obligation to maintain a company secretary and company seal. Also, offers the flexibility to designate a service address and opt for model articles of association.
Foreign Investment Companies
The Act classifies companies with foreign shareholding as ‘foreign investment companies’, detailing specific requirements for their incorporation and operation.
Annual Requirements
The Act retains previous mandates for AGMs, Directors Report, Annual Accounts, Audits (if applicable) while modernizing relevant provisions.
Records Maintenance
Companies are mandated to maintain various registries, including those for members, directors, charges, significant beneficial owners, and more.
Board of Directors
The Act permits the appointment of representative directors, outlines minimum eligibility requirements, defines rules on appointment and removal, stipulates directors’ obligations and fiduciary duties, and mandates a minimum number of annual meetings.
Shareholders
The Act provides clarity on AGM requirements, proxies, voting procedures, and resolutions.
Share Transfers
The introduced changes grant the right of first offer to existing shareholders and clarify the rules relating to registering share transfers.
Call on Shares
The Act clarifies rules and procedures for calling on unpaid shares and the forfeiture of shares.
Secured Transactions
The Act introduces a framework for companies to raise funds using shares and assets as security, necessitating registration of charges.
Inactive Companies
The Act specifies the circumstances under which the Registrar of Companies can designate a company inactive as and outlines the subsequent consequences.
Regulatory Fees
The Act replaces the annual fee structure with a service-based fee for various regulatory services.
Non-compliance Penalties
Companies, directors, managing directors, third parties are subjected to reporting obligations and compliance with Registrar’s directives. Non-compliance results in penalty fines.
