- Introduction and name
- Formation of companies
- Private Companies and Public Companies
- Memorandum and Articles of Association
- Contents of memorandum
- Contents of the articles
- Registration
- Certificate of incorporation
- Company names
- Change of name
- Calling for change of name
- Registration of a new name
- Effect of change of name
- Effect of registration
- Register of members
- List of the members
- Liability of the members
- Alteration of memorandum and articles of association
- Private company becoming public
- Public Company becoming private
- Effect of change in company status
- Offer of shares and debentures to the public
- Shares
- Allotment of shares
- No share issued as a discount
- Shares jointly owned
- Financial assistance for the purchase of company shares and debentures
- Share certificate
- Shares and debentures issued for a consideration
- Transfer of Shares
- Transfer of shares and registration
- Transmission of shares
- Failure to answer a call up for share payment
- Increase of capital
- Reduction of share capital
- Company Seal
- Commencement of business
- Management of the company
- Board of Directors
- Company secretary
- Loans and guarantees to directors
- Appointment and removal of directors
- Removal of directors
- Meetings of the board
- Chairman of the board
- Quorum
- Minutes
- Annual general meeting
- Extraordinary general meeting
- Notice for annual general meeting
- Quorum for a general meeting
- Right to attend general meetings
- Chairman of the general meeting
- Minutes
- Voting
- Accounting and audit
- Duty to keep accounting records
- Where and the period for keeping records
- Passing of accounts
- Annual accounts and annual report
- Contents of the accounts
- Laying of the accounts and reports before the general meeting
- Accounts and reports to be delivered to the Registrar
- Appointment of auditor
- Auditor's report
- Power of the Registrar of Companies to convene a general meeting of the company
- Members applying for a court order
- Abuse of corporate entity status
- Winding up of a company
- Voluntary dissolution
- Cessation of business on commencement of the winding up
- General meeting to dissolve the company
- Removal of the person appointed to wind up the company
- Winding up by the court
- Persons who may petition for a winding-up order
- Notification of the person appointed to the Registrar of Companies
- Notice of the winding up of the company
- Result of the commencement of the winding up process
- Duties of the person or persons appointed to windup the company
- Qualification of the person or persons appointed to wind up the company
- Transfer of shares after the commencement of winding up process
- All money to be secured in a bank account
- Maintenance of accounts
- Decision of the court
- Order of settling company's debt
- The final account
- End of winding up
- Companies registered outside Republic of Maldives
An unofficial translation
THE COMPANIES ACT OF THE REPUBLIC OF MALDIVES
LAW NO: 10/96
Introduction and name (b) This law shall be cited as the “The Companies Act of the Republic of Maldives”.
Formation of companies
2. Companies in the Maldives shall be formed and managed in the manner prescribed in this Act.
Private Companies and Public Companies
3. (a) Any two (2) or more persons may as prescribed in this Act, having the liability of its members limited, form a private company. A private company is a company whose memorandum and articles of association states that it is a private company, and that shares may only be transferred in accordance with its articles of association and the number of members of the company is limited to fifty (50) and the sale of shares to the public is prohibited by the articles of association.
(b) Any ten (10) or more persons may in accordance with this Act having the liability of its members limited, form a public company. A public company is a company whose memorandum and articles of association states that it is a public company and can sell shares to the public in accordance with this Act.
Memorandum and Articles of Association
4. Every company shall have a memorandum and articles of association which shall contain the names of the persons forming the company and shall be signed by them in the presence of two witnesses who shall also sign the same.
Contents of memorandum
5. The memorandum of every company must state that:
(a) the name of the company.
(b) whether the company is a private company or a public company.
(c) the registered office of the company.
(d) the objects of the company.
(e) the liabilities of the members are limited.
(f) the authorized capital of the company and the manner in which it is to be procured.
Contents of the articles
6. (a) The articles of association of every company must prescribe, in accordance with this Act, how the company shall be managed.
(b) The articles of association of every private company must state that:
(1) It cannot sell shares to the public.
(2) Shares of the company may only be transferred to a party approved by the Board of Directors in accordance with the articles.
(3) The number of shareholders of the company is limited to fifty.
Registration
7. (a) The persons forming a company shall submit to the Registrar of Companies the memorandum and articles of association together with the registration fee and the annual fee specified in the schedules of this Act.
The company shall be registered if the contents of the memorandum and articles of association do not contravene the Islamic principles or this Act or any other laws of the Country.
(b) Every company registered under this Act shall pay the annual fee specified in the schedule of this Act. If a company fails to pay the annual fee as stipulated in the schedule by the end of March, the Registrar of Companies reserves the right to suspend all business activities of the company until payment of the fee. If the annual fee remains unpaid by the end of May, the Registrar shall apply to the court for the winding up of the company.
Registration of private companies
(c) A private company shall be registered if the company's memorandum and articles of association states that it is a private company and if the authorized capital of the company stipulated in the memorandum and articles of the company is not less than MRF 2,000/- and the articles of association states that the company's shares may only be transferred from a member to another person in accordance with the articles of association and the memorandum and articles of association limits the membership of the company to fifty and the articles of association prohibits the sales of shares to the public.
Registration of public companies
(d) A public company shall be registered if the persons forming the company agree to buy shares of at least MRF 1,000,000/- (Maldivian Rufiyaa one million) in value and pay the said money to the company and submit to the Registrar of Companies evidence of the payment.
(e) If a company is registered and having paid the registration fee as prescribed in subsection (a) of this section; subsequently increases the authorized capital, then the company shall pay the fee for the increase in the proportion stipulated in the schedule of this Act.
Certificate of incorporation
8. The Registrar of Companies shall upon registration of the company in accordance with Section 7 of this Act issue to the company a certificate that the company is incorporated.
9. The Registrar of Companies reserves the right to call upon changes to memorandum and articles of association of the company delivered to him, to comply with the Act.
Company names
10. (a) The name given to a company shall be a name acceptable to the Registrar of Companies. If the Registrar of Companies feels that the proposed name is unacceptable he will not register it.
(b) The name of every private company shall end or bear as a part of the name, the words “private limited” or its abbreviation “Pvt Ltd”.
(c) The name of every public company shall end or bear as a part of the name, the words “public limited company” or its abbreviation “PLC”.
(d) Every company shall have its name displayed in Dhivehi outside its place of business.
(e) The name of the company and its registration number shall appear on all documents specified by the Regulations promulgated under this Act.
Change of name
11. A company may, by special resolution change its name.
Calling for change of name
12. Where a company has been registered by a name which in the opinion of the Registrar of Companies is unacceptable, the Registrar of Companies reserves the right to direct the company to change its name. If the Registrar of Companies so directs, the company must change its name within 21 days from that date of direction.
Registration of a new name
13. The Registrar of Companies shall, upon being informed by a company that it has changed its name in accordance with either section 11 or 12 of this Act, and if he finds the new name acceptable, shall issue a certificate in the new name. The change of name has effect from the date the altered certificate is issued.
Effect of change of name
14. A change of name by a company under section 11or12 of this Act does not effect any rights or obligations of the company or render defective any legal proceedings by or against it.
Effect of registration
15. (a) The company upon registration shall become a legal entity distinct from its members by the name contained in the memorandum of association capable of forthwith exercising all the powers and functions specified in its memorandum and articles of association and of suing and being sued and having a perpetual succession and a common seal with the power to hold movable property and immovable property as is permitted by law.
(b)The memorandum and articles of association of a company, when registered, bind the company and its members to the same extent as if they respectively had been signed by each member and contained covenants on the part of each member to observe all the provision of the memorandum and of the articles.
Register of members
16. (a) Every company shall keep a register of its members and enter in it the following particulars:
the names and addresses of the members
the number of shares held by each member, and
the amount paid on the shares of each member
(b) Every person whose name appear in the registry stated in sub-section (a) of this section shall be a member of the company
List of the members
17. Every company shall deliver to the Registrar of Companies a list of its members within thirty days (30) after its annual general meeting.
Liability of the members
18. (a) A statement in the memorandum of a company stating that the liability of its members is limited shall mean that the liability of its members is limited for all purposes to the amount, if any, unpaid on the shares respectively held by them and shall when the memorandum and articles of association are registered, for all legal purposes have effect accordingly.
(b) In the event a limited liability company is wound up every member of the company shall be liable to contribute to the assets of the company only to the extent of the amount unpaid, if any, on the nominal value of his/her shares.
Alteration of memorandum and articles of association
19. Subject to the provisions of the Act and in accordance with the articles of association, a company may with prior approval of the Registrar of Companies, alter its memorandum and articles of association by a special resolution at a general meeting.
Private company becoming public
20. (a) A private company may be re-registered as a public company by passing a special resolution that it should be so re-registered and an application for re-registration is delivered to the Registrar of Companies and the company is re-registered as a public company in accordance with this Act.
(b) The application for re-registration of a private company to a public company delivered to the Registrar of companies shall contain the following:
1.The special resolution passed by the private company to become public.
2.The special resolution passed by the company to make such alterations in the memorandum and articles as are necessary to bring them into conformity with the requirement of this Act.
3.The memorandum and articles of association of the company after bringing them into conformity with the memorandum and articles of association of a public company as prescribed in this Act.
4.The company prospectus.
(c) If an application to re-register a private company to a public company is delivered to the Registrar of Companies in accordance with sub-section (a) and (b) of this section, the company shall be re-registered and the certificate of incorporation shall be issued if the requirements specified in this Act for the formation and registration of a public company are fulfilled.
Public Company becoming private
21. (a). A public company may be re-registered as a private company if a special resolution that it should be so re-registered is passed, and an application for re-registration is delivered to the Registrar of Companies and the company is re-registered as a private company in accordance with this act.
(b). The application for re-registration of a public company to a private company delivered to the Registrar of Companies shall contain the following:
(1) The special resolution passed by the public company to become private.
(2) The special resolution passed by the company to make such alterations to the memorandum and the articles as are necessary to bring them in conformity with requirements of this Act.
(3) The memorandum and the articles of association of the company after bringing them into conformity with the memorandum and the articles of association of a private company as prescribed in this Act.
(c) If an application to re-register a public company as a private company is delivered to Registrar of Companies in accordance with sub-section (a) and (b) of this section, the company shall be re-registered and the certificate shall be issued if the requirements specified in this Act for the formation and registration of a private company are fulfilled.
Effect of change in company status
22. If a company changes its status from private to a public company or from a public to a private company in accordance with section 20 and 21 of this Act, it shall in no way effect the rights or obligation of the company nor shall it effect a proposed contract or subsisting contracts or to any legal proceedings by or against the company.
Offer of shares and debentures to the public
23. (a) Companies other than those registered under this Act as public companies shall not sell shares or debentures to the public.
(b) Sale of shares and debentures to the public shall mean that the company's share and debentures may be purchased by any person of the public and that the shares and debentures of the company are freely transferable from one person to another without the approval of the company.
The articles of association of any public company shall not prohibit the sale of shares and debentures to the public or the transfer of the same. However in instances where an unpaid or a partly paid share is being transferred, the board of directors has the authority to object the transfer until payment.
Prospectus
24. Public companies shall only sell shares and debentures to the public after issuing a prospectus in accordance with this Act and Regulations promulgated under this Act and as stipulated in the prospectus.
Permission to sell shares and debentures to the public and the amount
25. Public companies shall sell shares and debentures to an amount equivalent to the amount paid up by its members for the time being for the shares and debentures of the company.
Form of the prospectus
26. The prospectus stated in section 24 of this Act shall be in the form stipulated in section 27 of this Act and in accordance with the regulations promulgated under this Act.
Contents of the prospectus
27. The prospectus stated in section 24 of this Act shall contain the following:
(a) Details of the assets, liabilities and other obligations of the company.
(b) Financial status of the company.
(c) Information required by investors to invest in the company and any other information generally expected by investors to be included in the prospectus.
(d) Contain such information as may be prescribed by Regulation made under this Act.
False information in prospectus
28. (a) Persons responsible for preparing a prospectus in which false information is intentionally included shall be guilty of an offense and each such person shall be liable to a fine not exceeding MRF 100,000/-.
(b) The board of Directors of the company at the time the prospectus is delivered to the Registrar of Companies for approval shall be deemed persons responsible for preparing the prospectus.
Shares
Allotment of shares
29. If a company makes an allotment of its shares, it shall within thirty (30) days of such allotment deliver to the Registrar of Companies a list of names and addresses of the allot tees, the number, the nature and the value of the shares allotted.
Value of shares
30. (a) The share capital of the company shall be divided into shares of equal value. The share capital of the company may be divided into different classes of shares or when the company makes an allotment of shares, it may create shares of various classes with different rights attached, as may be prescribed by Regulations made under this Act.
(b) If the share capital of a company is divided or if a company allots shares of different classes with variations of rights attached to them, the company shall as may be prescribed by Regulations made under the Act make provisions in its article of association for variation of the rights attached for different classes of shares and for revocation of such rights.
No share issued as a discount
31. No share in a company shall be issued at less than its nominal value.